How Does New Jersey Resources Corporation (NYSE:NJR) Fare As A Dividend Stock?
There is a lot to be liked about New Jersey Resources Corporation (NYSE:NJR) as an income stock, over the past 10 years it has returned an average of 3.00% per year. The stock currently pays out a dividend yield of 2.62%, and has a market cap of US$3.63B. Should it have a place in your portfolio? Let’s take a look at New Jersey Resources in more detail. View our latest analysis for New Jersey Resources
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it the top 25% annual dividend yield payer?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share risen in the past couple of years?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
Does New Jersey Resources pass our checks?
New Jersey Resources has a trailing twelve-month payout ratio of 41.35%, which means that the dividend is covered by earnings. Going forward, analysts expect NJR’s payout to increase to 54.22% of its earnings, which leads to a dividend yield of 2.78%. However, EPS is forecasted to fall to $2.36 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of NJR it has increased its DPS from $0.56 to $1.09 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes NJR a true dividend rockstar. Compared to its peers, New Jersey Resources has a yield of 2.62%, which is on the low-side for Gas Utilities stocks.
Next Steps:
Considering the dividend attributes we analyzed above, New Jersey Resources is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for NJR’s future growth? Take a look at our free research report of analyst consensus for NJR’s outlook.
Historical Performance: What has NJR’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
