MDU Resources Group (MDU) is reporting strong growth numbers from its oil and natural gas production business segments. After the company reported strong second-quarter results on May 2, it went ahead and lifted its full-year guidance. In spite of the run-up in its share price and the bullish fundamentals, this stock still looks attractively valued at current levels.

MDU Resources Group operates as a natural resource company in the United States. The company specializes in providing energy storage and transportation services, was founded in 1924 and is headquartered in Bismarck, North Dakota.

Second-Quarter Results

MDU reported second-quarter results on May 2 that demonstrate the strong demand energy services companies have been experiencing over the last 12 months.

Income was up big from last year, growing to $70.9 million from $41.2 million in the same period last year, a 72% increase. This produced earnings of 39 cents per share, safely ahead of analyst estimates of 36 cents per share.

This is the second consecutive quarter that MDU has surprised and beaten analyst estimates, having done so last quarter by 4 cents, or 8.33%.

MDU noted that its Resources division, its natural gas and oil production business, saw a 65% jump in its earnings from the same period last year.

Guidance and Estimates Are Up

After the good quarter, MDU raised its full-year guidance and now expects to earn between $1.85 and $2.10 per share. The analyst community is more bullish, projecting full-year earnings of $2.27 per share, up from projections of $1.93 per share 90 days ago.

Valuations

Based upon this earnings projection, this stock looks attractively priced, trading with a forward P/E multiple of 13.5X, a discount to the overall market.

The Chart

Shares of MDU have been surging in 2008, topping off at over $35 per share in early July after opening the year just above $27. More recently, this stock has pulled back, but is still well in the green on the year. With a bullish current-year and next-year earnings projection, this company looks well positioned to deliver more gains.

Content Courtesy: Zacks Investment Research

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