Is MDU Resources Group, Inc. overvalued or undervalued?

As of 4 April 2025, the valuation grade for MDU Resources Group, Inc. has moved from fair to expensive, indicating that the company is overvalued. The current P/E ratio stands at 13, while the industry average P/E is significantly higher at approximately 23.43 for Southwest Gas Holdings, which is also classified as expensive. Additionally, the EV to EBITDA ratio is 9.26, which is lower than the peer average, suggesting that while the company may have some attractive metrics, it is still not enough to justify its current valuation.
In comparison to its peers, New Jersey Resources Corp. is rated attractive with a P/E of 11.29, which further emphasizes the overvaluation of MDU Resources. The company's dividend yield of 3.05% and ROE of 9.97% are decent, but they do not compensate for the high valuation relative to peers. Notably, MDU Resources has underperformed the S&P 500 year-to-date, with a return of -8.38% compared to the index's 2.44%. Overall, MDU Resources Group, Inc. appears to be overvalued in the current market environment.