MDU Resources Group (MDU) isn’t exactly a utility. It is a North Dakota-based holding company that has some regulated electric and gas utility assets, as well as a small midstream business, notes Robert Rapier, growth and income expert and editor of Investing Daily's Utility Forecaster.

But it is primarily a construction materials and services company. In 2018, those businesses were responsible for nearly 73% of revenues, while the regulated electric and gas businesses were responsible for just 25.6% of all revenues.

MDU has been a company in transition. Along with the decline in its utility business, a few years ago the company unloaded the last of its oil and gas production properties. Those properties had really been a drag on earnings during the energy bust.

Proceeds from the divestitures totaled around $500 million and management allocated the net proceeds toward its utilities’ $1.5 billion five-year capital expenditure program.

The 2016 exit from the oil and gas business helped lower the risk profile of the company and boost investor confidence. The company’s biggest revenue generator today is its Knife River Corporation construction materials business. The company mines aggregates and markets crushed stone, sand, gravel and related construction materials.

MDU Construction Services Group is the second largest revenue generator, as well as one of the largest solar contractors in America. This group provides utility construction services.

Electric and Natural Gas Utilities segment serves 1.1 million customers across eight states. Finally, the Pipeline and Midstream segment, WBI Energy, provides natural gas transportation, underground storage and gathering services.

With a record backlog of business at the end of Q3, and the construction and midstream businesses both growing at double-digit rates, business looks good for MDU. The company projects 5%-8% average annual earnings growth for the foreseeable future, well above the utility sector average.

The current yield of 2.8% isn’t much to get excited about, but with the work backlog and projected growth rate, there’s plenty of upside here. That can’t be said for a lot of the pure utilities in the portfolio, as most are close to fully valued.

MDU is a Dividend Aristocrat, boasting 81 consecutive years of quarterly dividend payments and 28 consecutive years of dividend increases. With a modest payout ratio of 57%, there’s plenty of room for more dividend increases even if business slows down.

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