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- NYSE:MDU
Should You Think About Buying MDU Resources Group, Inc. (NYSE:MDU) Now?
MDU Resources Group, Inc. (NYSE:MDU), might not be a large cap stock, but it saw a decent share price growth in the teens level on the NYSE over the last few months. As a well-established company, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on MDU Resources Group’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for MDU Resources Group
Is MDU Resources Group still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.17% above my intrinsic value, which means if you buy MDU Resources Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $29.47, there’s only an insignificant downside when the price falls to its real value. Furthermore, MDU Resources Group’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from MDU Resources Group?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 21% over the next couple of years, the future seems bright for MDU Resources Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in MDU’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on MDU, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 1 warning sign for MDU Resources Group and you'll want to know about it.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
About NYSE:MDU
MDU Resources Group
Engages in the regulated energy delivery businesses in the United States.
Low with imperfect balance sheet.
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