What they do
RGC Resources, of Roanoke, Virginia, owns Roanoke Gas, which distributes natural gas to about 63,800 residential, commercial and industrial customers in Roanoke and nearby localities, at rates set by Virginia's State Corporation Commission. A subsidiary also holds a stake of under 1% in the Mountain Valley Pipeline and its Southgate and Boost projects.
Why we picked it
- 01$3.85M
Rates went up. On 1 July Roanoke Gas reached a settlement with the staff of Virginia's State Corporation Commission for an extra $3.85M of revenue a year, and it has billed the agreed rates since 1 August. The company expects a final ruling in the first quarter of fiscal 2027, October to December 2026.
- 02+5.2%
Profit is growing. Net income in the nine months to 30 June was $14.2M, or $1.37 a diluted share, against $13.5M, or $1.31, a year earlier, up 5.2%. The company puts that down mainly to the higher base rates from 1 January and lower interest expense and income taxes, slightly offset by inflation in operating costs.
- 03$192K
Insiders are buying. Between 18 August and 24 September directors John Williamson III and Robert Johnston and CEO Paul Nester bought 9,094 shares in the open market for about $192K, at $20.62 to $21.45 a share. None of the purchases was made under a 10b5-1 plan.
- 043.8%
The dividend keeps rising. The quarterly dividend is $0.2175 a share against $0.2075 a year ago, about 3.8% a year at the 22 October close, and the company says its board has raised the annual dividend every year since 2004.
The risk
The catch: this is a slow-growing regulated utility, and its growth depends on what regulators allow. The June quarter's profit was flat at $0.05 a share, the company named inflation and an industrial customer that ceased operations as drags, and the July to September quarter is seasonally weak (it lost $0.2M last year). The interim rates billed from 1 January to 31 July were subject to refund, and the company has booked a provision for the difference; the Commission's final ruling is still to come. Long-term debt was $145.6M at 30 June against $122.9M of equity, and at the 22 October close th
The full analysis
RGC Resources ($RGCO): a settled rate case, insiders buying, and a dividend that keeps rising
Our view: bullish, because Roanoke Gas has settled its rate case for an extra $3.85M of revenue a year, nine-month earnings are up 5.2%, two directors and the CEO bought about $192K of stock in the open market after the settlement and the results, and the dividend keeps rising.
The thesis
RGC Resources, of Roanoke, Virginia, owns Roanoke Gas, which distributes natural gas to about 63,800 residential, commercial and industrial customers in Roanoke and nearby localities, at rates set by Virginia's State Corporation Commission. A subsidiary also holds a stake of under 1% in the Mountain Valley Pipeline and its Southgate and Boost projects. Our case is simple: the rate increase is agreed with the regulator's staff, earnings are growing with it, and two directors and the CEO bought stock in the open market in August and September at $20.62 to $21.45.
The evidence
Rates went up. Roanoke Gas applied on 2 December 2025 for $4.3M a year more in base rates and billed interim rates from 1 January, subject to refund. On 1 July it reached a settlement with the Commission's staff for an extra $3.85M of revenue a year and has billed the agreed rates since 1 August; the company expects a final ruling in the first quarter of fiscal 2027, October to December 2026 (Q3 10-Q, Aug 2026).
Profit is growing. Net income in the nine months to 30 June was $14.2M, or $1.37 a diluted share, against $13.5M, or $1.31, a year earlier, up 5.2%. The company puts that down mainly to the higher base rates from 1 January and lower interest expense and income taxes, slightly offset by inflation in operating costs (Q3 10-Q).
Insiders are buying. Between 18 August and 24 September directors John Williamson III and Robert Johnston and CEO Paul Nester bought 9,094 shares in the open market for about $192K, at $20.62 to $21.45 a share. None of the purchases was made under a 10b5-1 plan (Form 4s, Aug to Sep 2026).
The dividend keeps rising. The quarterly dividend is $0.2175 a share against $0.2075 a year ago (Q3 release), and dividends declared rose to $0.83 a share in fiscal 2025 from $0.62 in fiscal 2018 (10-Ks). The company says its board has raised the annual dividend every year since 2004 (proxy, Dec 2025).
What the market is missing
At the 22 October close of $23.05 the company has a market value of about $240M. Four dividends at the current rate come to $0.87 a share, about 3.8% of the price. The stock trades at about 17 times the last four quarters' net income of $14.0M and about 1.95 times its $122.9M of equity. Directors and officers owned 7.2% in November 2025, counting options, before the purchases above (proxy).
The risks
This is a slow-growing regulated utility, and its growth depends on what regulators allow. The June quarter's profit was flat at $0.05 a share, and the CEO named persistent inflation and an industrial customer that ceased operations as drags (Q3 release). The July to September quarter is seasonally weak: it lost $0.2M last year. The interim rates billed from 1 January to 31 July were subject to refund, and the company has booked a provision for the difference; the Commission's final ruling is still to come. Long-term debt was $145.6M at 30 June against $122.9M of equity.
What would change our mind
A final ruling well below the settlement, earnings growth stalling once the new rates are in the base year, a dividend increase that stops, or debt rising faster than the rate base can earn on it.
Sources: RGC Resources Q3 fiscal 2026 results release (5 Aug 2026) and 10-Q (6 Aug 2026); Form 4s (19 Aug to 25 Sep 2026); 10-K for fiscal 2025 (4 Dec 2025); proxy statement (9 Dec 2025); close from Yahoo Finance and Nasdaq, 22 Oct 2026.
By the numbers
| Quarter | Revenue | Gross margin | Net income | Cash | Debt | Diluted shares | Filing |
|---|---|---|---|---|---|---|---|
| Q2 2630 June 2026 | $17.1M | n/a | $559K | $2.5M | n/a | 10.4M | 10-Q, 6 August 2026 |
| Q1 2631 March 2026 | $45.5M | n/a | $8.7M | $3.4M | n/a | 10.4M | 10-Q, 7 May 2026 |
| Q4 2531 December 2025 | $30.3M | n/a | $4.9M | $2.7M | n/a | 10.4M | 10-Q, 9 February 2026 |
| Q3 25*30 September 2025 | $14.3M | n/a | -$204K | $2.3M | n/a | n/a | 10-K, 4 December 2025 |
| Q2 2530 June 2025 | $17.3M | n/a | $538K | $2.1M | n/a | 10.3M | 10-Q, 6 August 2026 |
| Q1 2531 March 2025 | $36.5M | n/a | $7.7M | $2.2M | n/a | 10.3M | 10-Q, 7 May 2026 |
| Q4 2431 December 2024 | $27.3M | n/a | $5.3M | $2.1M | n/a | 10.3M | 10-Q, 9 February 2026 |
| Q3 24*30 September 2024 | $13.1M | n/a | $141K | $894K | n/a | n/a | 10-K, 4 December 2025 |
Source: the company's 10-Q and 10-K filings on SEC EDGAR, as tagged in their XBRL data. Each quarter uses the most recent filing that reports it, so restated quarters compare cleanly. Quarters are labelled by the calendar quarter they end in. Debt is current plus long-term debt; net income is as reported, including any discontinued operations. *Fourth quarter: the full year in the 10-K less the first nine months. n/a: not reported for that quarter on its own.
Insiders
All current directors and officers as a group (15 persons), including options own 7.2% of the shares (Williamson 1.7%, Nester 1.2%; before the Aug to Sep 2026 purchases), according to the DEF 14A filed 9 December 2025.
| Date | Who | Shares bought | Price | Value | Filing |
|---|---|---|---|---|---|
| 24 September 2026 | John B. Williamson III (7 buying days, 1 to 24 Sep)Director | 5,624 | $21.13 | $119K | Form 4 |
| 23 September 2026 | Robert B. Johnston (4 buying days, 18 Aug to 23 Sep)Director | 2,670 | $21.00 | $56K | Form 4 |
| 23 September 2026 | Paul W. Nester (2 buying days, 10 and 23 Sep)President & CEO | 800 | $21.22 | $17K | Form 4 |
Open-market purchases (Form 4, transaction code P) over the last twelve months. Sales, grants and option exercises are not shown.
What to watch
- October to December 2026
The State Corporation Commission's final ruling on the rate case settled with its staff on 1 July. 10-Q Q3 FY2026
- Mid to late November 2026
Fiscal 2026 results, which carry the higher base rates for nine of the twelve months (last year's came on 19 November). EDGAR filing list (8-K 2.02 filed 19 Nov 2025)
Sources: Q3 FY2026 release and 10-Q (Aug 2026), Form 4s (Aug to Sep 2026), close 22 Oct 2026.
Market value: shares outstanding on the latest SEC filing cover page, times the latest price.