3.73% Dividend Yield, 22 Years of Dividend Hikes – The Local Gas Utility Delivering Steady Energy and Dividends
The reliable heartbeat behind community energy
A regional gas company powers thousands of homes and businesses, ensuring steady supply even during harsh weather. Its business model is built on stable regulated revenues and smart infrastructure investments, supporting both local reliability and long-term growth. RGC Resources is the kind of company that doesn’t need flashy headlines—its power comes from steady cash flows, a loyal customer base, and a decades-long history of adapting to change.
RGC Resources (RGCO)
Financial Score: 86 / 99
Quick Tip
To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.Interesting stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn.RGC Resources serves over 67,000 customers in Virginia through its subsidiary Roanoke Gas Company, which has operated since 1883. The company focuses on stable development, infrastructure upgrades, and diversifying income through its stake in the Mountain Valley Pipeline (MVP). In fiscal 2025, net income reached $13.3 million, up 15% from 2024, with EPS at $1.29. MVP contributed $4.8 million to earnings, and gas volumes grew 6% due to higher residential and commercial demand. Capital expenditures are expected to be about $22 million annually, supporting pipeline replacements, environmental upgrades, and RNG (renewable natural gas) projects. The company recently secured $30 million in credit for Roanoke Gas, boosting liquidity for expansion.
Dividends built on consistent cash generation
The annual dividend is $0.87, yielding 3.73%, with a payout ratio near 64.43%. The company has increased its dividend for 22 consecutive years, growing payouts by 21% over the past five years. Dividend growth is supported by regulated earnings, operational efficiency, and incremental income from infrastructure projects. In November 2025, the board raised the annual dividend to $0.87 per share, reflecting confidence in cash flow and growth prospects. The SAVE Plan, with $15.7 million in 2025 spending, is expected to generate $1.489 million in annualized revenues, further supporting sustainable payouts.
2025 financial highlights
Net income for the year was $13.3 million (+15% YoY), EPS was $1.29. MVP income added $4.8 million to earnings. Gas volumes rose 6% on higher demand. Q4 2025 results exceeded analyst expectations, with revenue growth driven by colder weather and industrial demand. Free cash flow remains healthy, funding dividends and further investments. The Virginia State Corporation Commission recently approved a $4.08 million annual revenue increase and a 9.9% ROE, reinforcing earnings quality and growth potential.
Growth driven by infrastructure and efficiency
RGC Resources’ growth is anchored in its MVP stake and operational improvements. The company continues upgrading local infrastructure, reducing risks and strengthening its market position. In Q3 2025, the company installed 2.7 miles of main pipeline—more than the entire prior fiscal year—and connected 359 new customers. The SAVE Plan includes $50–55 million in infrastructure upgrades, targeting pipeline replacement and environmental compliance. RNG facilities, operational since 2023, add environmental credits and diversify revenue streams. The MVP’s ramp-up is expected to boost earnings as the asset matures, while the company manages risks with extended debt maturities and strategic financing.
Fun Fact – Roanoke Gas Company’s WWII legacy and green initiatives
During World War II, Roanoke Gas Company operated a unique plant producing synthetic gas from coal for the war effort. After the war, the plant was converted to pipeline gas, cementing the company’s reputation as an innovator. Today, RGC Resources partners with the Western Virginia Water Authority to produce commercial-quality renewable natural gas (RNG) from biogas at the Roanoke Regional Water Pollution Control Plant—the first of its kind in Virginia.
Final Take
RGC Resources combines stable regulated revenues with strategic infrastructure investments, supporting a 3.73% dividend yield and 22 years of consecutive dividend growth. The company’s Financial Score of 87 from BeatMarket reflects solid fundamentals and risk management, but falls short of the top-tier 90+ bracket—indicating reliable, not bulletproof, performance. This score signals healthy cash flow and effective controls, but investors should monitor regional and regulatory risks, as well as the company’s exposure to weather, commodity pricing, and regulatory decisions. Pipeline expansion, new customer connections, RNG projects, and its stake in the Mountain Valley Pipeline (MVP) provide growth upside, but these also introduce execution and market risks. For income investors, RGC Resources offers steady utility exposure with moderate growth potential, but closer scrutiny of its payout ratio, regulatory environment, and infrastructure execution is warranted.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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