MeritValue

RGC RESOURCES INC

RGCOdata completeness 100%16 fiscal years on file
The thesis, from the filings

RGC RESOURCES INC earns about 2% on invested capital, but has diluted owners by 25% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $11.36 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$73.9M1$82.4M2$94.4M3$80.5M4$93.9M4
Net income$10.1M5−$31.7M6$11.3M7$11.8M8$13.3M8
Operating cash flow$11.6M9$15.6M10$23.8M11$17.4M12$28.9M12
Capital expenditure$20M13$25.5M14$25.3M15$22.1M16$20.7M16
Free cash flow (derived)−$8.4M9−$9.91M10−$1.51M11−$4.66M12$8.22M12
Total debt$140.5M17$137M18$141.2M19$148.6M20$148.6M20
Cash & equivalents$1.52M21$4.9M22$1.51M23$894,18524$2.32M24
Diluted shares8.3M9.1M9.9M10.2M10.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$110.15
your share of equity
Profit it earned you last year
$12.88
Free cash flow it threw off
$7.97
Debt you’d be carrying
$144.17

10 shares is a claim on $110.15 of net worth that earned you $12.88 and generated $7.97 of cash last year, against $144.17 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
2% avg · 5y
FY21 6%FY22 -14%FY23 6%FY24 7%FY25 7%

It earned an average 2% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+25% shares · 5y

Share count is up 25% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$11.36
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$11.3M
  • growthAssumed0.0%
Graham Number
$17.88
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-09-30 · accession 0001437749-22-028313 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-09-30 · accession 0001437749-23-033392 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-09-30 · accession 0001437749-24-036744 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2024-09-30 · accession 0001437749-25-036827 (RevenueFromContractWithCustomerExcludingAssessedTax)
  5. 10-K · period ending 2021-09-30 · accession 0001437749-22-028313 (NetIncomeLoss)
  6. 10-K · period ending 2022-09-30 · accession 0001437749-23-033392 (NetIncomeLoss)
  7. 10-K · period ending 2023-09-30 · accession 0001437749-24-036744 (NetIncomeLoss)
  8. 10-K · period ending 2024-09-30 · accession 0001437749-25-036827 (NetIncomeLoss)
  9. 10-K · period ending 2021-09-30 · accession 0001437749-22-028313 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-09-30 · accession 0001437749-23-033392 (NetCashProvidedByUsedInOperatingActivities)
  11. 10-K · period ending 2023-09-30 · accession 0001437749-24-036744 (NetCashProvidedByUsedInOperatingActivities)
  12. 10-K · period ending 2024-09-30 · accession 0001437749-25-036827 (NetCashProvidedByUsedInOperatingActivities)
  13. 10-K · period ending 2021-09-30 · accession 0001437749-22-028313 (PaymentsToAcquirePropertyPlantAndEquipment)
  14. 10-K · period ending 2022-09-30 · accession 0001437749-23-033392 (PaymentsToAcquirePropertyPlantAndEquipment)
  15. 10-K · period ending 2023-09-30 · accession 0001437749-24-036744 (PaymentsToAcquirePropertyPlantAndEquipment)
  16. 10-K · period ending 2024-09-30 · accession 0001437749-25-036827 (PaymentsToAcquirePropertyPlantAndEquipment)
  17. 10-K · period ending 2021-09-30 · accession 0001437749-22-028313 (LongTermDebtNoncurrent)
  18. 10-K · period ending 2022-09-30 · accession 0001437749-23-033392 (LongTermDebtNoncurrent)
  19. 10-K · period ending 2023-09-30 · accession 0001437749-24-036744 (LongTermDebtNoncurrent)
  20. 10-K · period ending 2024-09-30 · accession 0001437749-25-036827 (LongTermDebtNoncurrent)
  21. 10-K · period ending 2021-09-30 · accession 0001437749-22-028313 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  22. 10-K · period ending 2022-09-30 · accession 0001437749-23-033392 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  23. 10-K · period ending 2023-09-30 · accession 0001437749-24-036744 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  24. 10-K · period ending 2024-09-30 · accession 0001437749-25-036827 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)