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what it is
RGC Resources sells and distributes natural gas through Roanoke Gas to about 62,500 customers in Roanoke, Virginia and surrounding localities (customer count, Sept 30, 2025 Form 10-K). RGC Midstream holds pipeline-related investments including Mountain Valley Pipeline exposure.
how it gets paid
FY2025 (ended Sept 30, 2025) consolidated operating revenues were ~$95.3M, up ~13% vs. prior year — gas utility revenue was ~$95.2M; non-utility revenue was only ~$0.1M (10-K consolidated statements).
why it's growing
FY2025 net income was ~$13.3M vs ~$11.8M in FY2024; diluted EPS $1.29 vs $1.16. Growth came largely from higher non-gas base rates, volumes, and gas costs passed through — partially offset by lower WNA revenue (10-K MD&A).
what just happened
Q1 FY2026 (quarter ended Dec 31, 2025): operating revenues ~$30.3M vs ~$27.3M prior-year quarter (~+11% vs. prior year); diluted EPS $0.47 vs $0.51. The company cited flat margins and higher personnel, IT, property tax, and depreciation costs, partly offset by lower interest expense (GlobeNewswire earnings release, Feb 5, 2026).
At a glance
B balance sheet — gets the job done, barely
35/100 earnings predictability — expect surprises
~17× trailing P/E — FY2025 EPS $1.29 vs ~$21.69 illustrative price
~4% dividend yield — Q1’26 declared $0.2175/sh (annualizes to ~$0.87)
Rate case: seeking ~$4.3M annualized revenue; interim rates Jan 1, 2026
xvary composite: 53/100 — below average
What they do
RGC Resources sells and distributes natural gas through Roanoke Gas to about 62,500 customers in and around Roanoke, Virginia (Sept 30, 2025 10-K).
This business wins because your gas bill is regulated, local, and hard to replace. The Virginia SCC sets rates; Roanoke Gas accounted for more than 99% of consolidated revenues in FY2025 and FY2024. That does not make it fast-growing — it makes it sticky. RGC Midstream adds pipeline equity exposure (e.g., MVP) on the side.
How they make money
~$95.3M
FY2025 consolidated operating revenue · +13% vs. prior year (10-K)
gas utility operating revenues
~$95.2M
non-utility operating revenues
~$0.1M
gross utility margin (non-GAAP; rev less cost of gas)
~$52.7M
cost of gas - utility (pass-through)
~$42.6M
The products that matter
distributes natural gas
Roanoke Gas Company
~62,500 customers · ~$95.2M utility revenue (FY2025)
Regulated distribution is essentially the entire operating revenue line. Customer count and revenue are from the FY2025 Form 10-K schedule and consolidated statements.
core cash engine
pipeline equity (not utility sales)
RGC Midstream / MVP
non-utility revenue ~$0.1M FY2025
RGC Midstream invests in interstate pipeline affiliates (including Mountain Valley Pipeline). Consolidated non-utility operating revenue is immaterial; economics show up partly through equity in earnings of unconsolidated affiliates on the P&L — read Note 5 in the 10-K for detail.
equity earnings driver
Key numbers
~4%
dividend yield
Q1 FY2026 declared $0.2175/sh per share (~$0.87 annualized) vs illustrative ~$21.69 → ~4% — income is the pitch, not top-line speed.
~17×
trailing p/e
~$21.69 ÷ FY2025 diluted EPS $1.29 (10-K). Forward multiples need your own estimates.
~19%
FY operating margin
FY2025 operating income ~$18.4M on ~$95.3M operating revenue (~19.4%) — utility spread after O&M and depreciation, before interest and affiliate earnings.
~$138M
long-term debt (net)
~$138M long-term debt, net, on the Dec 31, 2025 balance sheet in the Feb 5, 2026 Q1 release — up vs prior year; compare to ~$116M stockholders’ equity same date.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 75 / 100
- long-term debt, net (Dec 31, 2025) ~$138M · equity ~$116M (Q1 FY2026 release)
B — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for RGCO right now.
source: n/a — verify total return with your broker
What just happened
revenue up · earnings down
Q1 FY2026 operating revenues ~$30.3M (~+11% vs. prior year); diluted EPS $0.47 vs $0.51 prior-year quarter.
Net income ~$4.9M vs ~$5.3M. Operating income ~$6.55M vs ~$7.33M. The release cites a December rate filing seeking ~$4.3M in additional annualized revenue, with interim rates effective Jan 1, 2026 subject to refund.
~$30.3M
revenue
$0.47
diluted EPS
~$6.55M
operating income
the number that mattered
Costs rose faster than the top line this quarter — the filing’s rate-case narrative is the forward lever investors will watch into the next few quarters.
source: RGC Resources Q1 FY2026 earnings release (GlobeNewswire, Feb 5, 2026) · FY2025 Form 10-K
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What could go wrong
The top risk here is operating costs rising faster than regulated revenue at Roanoke Gas.
high
margin compression
Q1 FY2026 showed the pattern: revenue up ~11% vs. prior year, but net income fell to ~$4.9M on higher personnel, IT, property tax, and depreciation (per the Feb 5, 2026 release). The utility model only works cleanly when allowed revenue keeps pace.
If that keeps happening, the stock stops looking like a safe income name and starts looking like a slow squeeze.
med
premium valuation for a plain utility
A mid-teens trailing multiple on a small regulated gas name is not automatically cheap — you are paying for stability and yield, not growth optionality.
When expectations are full and execution is merely fine, the stock usually goes nowhere.
med
dividend cushion is thinner than it looks
FY2025 dividends declared were $0.83/sh vs diluted EPS $1.29 (~64% payout on that year). Q1’26 declared $0.2175 annualizes higher — watch coverage if earnings soften.
You do not need a disaster to pressure the payout story. A couple more messy quarters would do it.
med
cybersecurity and system disruption
The 10-K flags cyber risk directly. For a gas LDC, system and IT reliability is the operating backbone.
A serious incident would be operational first and reputational second. Neither would help a premium multiple.
Yield can look defensive, but ~$138M long-term debt (Dec 31, 2025) next to ~$116M equity, plus a rate case still working through the SCC, means execution and regulatory timing still matter.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
Q2 2026 earnings report
Estimated report date is may 5, 2026. You want to see whether revenue growth finally turns into cleaner profit growth.
metric
EPS coverage of the dividend
FY2025 paid $0.83 in dividends vs $1.29 diluted EPS. Q1’26 declared dividend annualizes above that — track whether earnings keep up.
risk
cost pressure inside the utility
Q1 FY2026 already showed the pattern: revenue up ~11% vs. prior year, net income down to ~$4.9M. If that repeats without rate relief, the thesis gets shakier.
trend
mix beyond regulated gas sales
Consolidated financials are almost entirely Roanoke Gas utility revenue; Midstream shows up more in equity earnings than in operating revenue — read segment notes when comparing years.
Analyst rankings
earnings predictability
35 / 100
This score says the earnings line is less reliable than you'd want from a utility. In human-speak: do not assume every quarter will be calm just because the business is regulated.
risk rank
3
A 3 rank means middling overall risk. Safer than many stocks, but not the kind of utility profile that lets you stop paying attention.
source: institutional data
Institutional activity
institutional ownership data for RGCO is being compiled.
source: institutional data
Price targets
analyst targets not verified here
Illustrative spot on this page: $21.69 — not a forecast.
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