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MDU Resources leads utility stock surge out of Q2'16

Utilitystocks continuedtheir upward climb during the 2016 second quarter with the S&P 500Utilities index again beating the broader S&P 500.

TheS&P 500 Utilities index was up 5.86% during the second quarter while theS&P 500 was up 1.90%. The Dow Jones Utility index was also up during the2016 second quarter, by 7.17%, and so was the SNL Energy index, by 7.18%.

Electricutility stock prices surged in the wake of Britain's vote to leave theEuropean Union, with dozens hitting 52-week highs June 30. Utilities were trading at a19% premium to the S&P 500 as of June 30, with Macquarie Capital (USA) Inc.analysts suggesting that investors are "moving into more traditional safehaven assets such as utilities and bonds after Brexit sharply increasedvolatility in financial markets and political uncertainty."

Top-performing stocks

led thelist of top-performing stocks for the second quarter with a gain of 23.33% toclose at $24 on June 30. The company started the quarter with the of its last oil and naturalgas assets, which yielded aggregate recognized proceeds and tax benefitsamounting to about $500 million, a majority of which were used to repay debtassociated with subsidiary Fidelity Exploration & Production Co.

Atthe time of the sale, MDU Resources President and CEO David Goodin said exitingthe exploration and production business lowered the company's risk profile andallowed it to reinvest into other business units, including its utilityoperations, which has a $1.5 billion, five-year CapEx program.

Thecompany's first-quarter consolidated adjusted earnings of $32.6 million, or 17cents per share, also beat the S&P Global Market Intelligence normalizedEPS consensus estimate of 13 cents.

MDUResources' stock performance was followed by ALLETE Inc., which saw its stock climb 15.27% to closethe second quarter at $64.63. Williams Capital Group the stock early in thequarter on concerns over one of ALLETE's industrial customers in northernMinnesota, but the brokerage later lifted its view on ALLETE shares on a more positive viewof improvements in the iron ore mining industry.

ALLETEtoo beat the S&PGlobal Market Intelligence normalized EPS consensus estimate after postingfirst-quarter 2016 net income of $45.9 million, or 93 cents per share.

, , , and also sawdouble-digit percentage gains in the quarter, SNL Energy data showed.

Bottom-performing stocks

Ofthe 10 lowest-performing utility stocks in the second quarter, only four sawnegative returns, according to SNL Energy data.

, whichannounced an $8.6 billion cash-and-stock deal to acquire in , saw its shares fall 5.74%to close at $30.40 per share June 30. Westar shares rose just over 13% to$56.09, below the total consideration of $60 per share offered to Westarstockholders.

and were also among the utilities that saw a decline in theirshare value — down 2.95% and 1.12% at the end of the second quarter,respectively.

Elsewhere,Unitil Corp.,Hawaiian Electric IndustriesInc. and ExelonCorp. were among the lowest-returning stocks during the secondquarter ended June 30.

SNL Energy is an offering ofS&P Global Market Intelligence, which is owned by S&P Global Inc.