MDU Resources Group Increases Dividend to $0.14, Faces Challenges in Maintaining Payments

MDU Resources Group will increase its dividend to $0.14, representing a 3.2% annual payment. However, the dividend yield is below the industry average, and estimates indicate the company may struggle to maintain dividend payments in the future due to high cash payout ratios. The dividend has been cut in the past, and earnings have fallen by 13% per year over the past five years.

MDU Resources Group, Inc. (NYSE: MDU) has announced an increase in its quarterly dividend to $0.14 per share, effective for the upcoming payment on October 1, 2025. This represents a 3.2% annual payment, up from the previous quarterly dividend of $0.13 per share [1].

The company's board of directors stated that this action underscores its commitment to delivering reliable, long-term value to stockholders. The increase is part of the company's strategy to reward ownership and reflects confidence in its business. The dividend is payable to stockholders of record as of September 11, 2025 [2].

However, the dividend yield of 3.4% is below the industry average, and estimates indicate that MDU Resources Group may struggle to maintain dividend payments in the future. The company's cash payout ratio stands at 49.06%, which is relatively high compared to the industry average. This high payout ratio could be a concern for investors, as it leaves less room for reinvestment in the business or to absorb potential earnings shortfalls [1].

Analyst sentiment towards MDU Resources Group has been mixed. While the company has a Moderate Buy rating among analysts, several top-rated analysts believe that other stocks are better buys. For instance, MarketBeat has identified five stocks that top analysts are quietly recommending to their clients, and MDU Resources Group was not on the list [1].

Moreover, the company's earnings have fallen by 13% per year over the past five years, and the dividend has been cut in the past. This historical trend suggests that the company's financial health may be a concern for investors. The company's quick ratio of 0.71, current ratio of 0.74, and debt-to-equity ratio of 0.75 indicate that it has a relatively low liquidity and solvency position [1].

In conclusion, while the dividend increase is a positive sign, investors should be cautious about the company's high cash payout ratio and its history of earnings declines. It is essential to monitor the company's financial performance and analyst recommendations closely.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-vanguard-group-inc-boosts-position-in-mdu-resources-group-inc-nysemdu-2025-08-16/
[2] https://www.prnewswire.com/news-releases/mdu-resources-announces-increased-quarterly-dividend-302530421.html