Freedom Capital Markets initiated coverage on MDU Resources Group Inc. (NYSE: MDU) with a Hold rating and a $20 price target.

The firm said MDU's regulated electric, natural gas, and pipeline operations across eight U.S. states provided stable returns and predictable cost recovery over the long term. Management planned to increase average annual capital expenditures by 27% between 2026 and 2030 compared with 2025 levels, which Freedom Capital estimated would support an earnings per share compound annual growth rate of 7.6% over the 2025-2030 period.

To fund this growth, the company announced an approximately $200 million equity issuance in addition to debt financing. MDU targeted a dividend payout ratio of 60% to 70%, with Freedom Capital forecasting 2026 dividends of $0.58 per share, implying a 3% yield, and a dividend CAGR of 10.3% through 2030.

While the firm viewed the medium-term macroeconomic outlook as supportive, citing easing personal consumption expenditure inflation that could aid tariff-based cost recovery, it warned that near-term regulatory gaps could pressure results. The stock's valuation premium versus peers on P/E and EV/EBITDA multiples also supported the Hold recommendation.