New Jersey Resources Corp's Dividend Analysis
Assessing the Sustainability and Growth of NJR's Dividend
New Jersey Resources Corp (NYSE:NJR) recently announced a dividend of $0.42 per share, payable on 2024-01-02, with the ex-dividend date set for 2023-12-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into New Jersey Resources Corp's dividend performance and assess its sustainability.
What Does New Jersey Resources Corp Do?
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New Jersey Resources is an energy services holding company with regulated and nonregulated operations. Its regulated utility, New Jersey Natural Gas, delivers natural gas to more than 575,000 customers in the state. NJR's nonregulated businesses include solar investments primarily in New Jersey and investments in several large midstream gas projects.
A Glimpse at New Jersey Resources Corp's Dividend History
New Jersey Resources Corp has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis.
New Jersey Resources Corp has increased its dividend each year since 1995. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 28 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down New Jersey Resources Corp's Dividend Yield and Growth
As of today, New Jersey Resources Corp currently has a 12-month trailing dividend yield of 3.60% and a 12-month forward dividend yield of 3.81%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, New Jersey Resources Corp's annual dividend growth rate was 7.80%. Extended to a five-year horizon, this rate decreased to 7.30% per year. And over the past decade, New Jersey Resources Corp's annual dividends per share growth rate stands at 6.90%.
Based on New Jersey Resources Corp's dividend yield and five-year growth rate, the 5-year yield on cost of New Jersey Resources Corp stock as of today is approximately 5.12%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, New Jersey Resources Corp's dividend payout ratio is 0.59.
New Jersey Resources Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks New Jersey Resources Corp's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. New Jersey Resources Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and New Jersey Resources Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. New Jersey Resources Corp's revenue has increased by approximately -0.70% per year on average, a rate that underperforms than approximately 83.71% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, New Jersey Resources Corp's earnings increased by approximately 16.60% per year on average, a rate that underperforms than approximately 26.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.80%, which underperforms than approximately 46.74% of global competitors.
Concluding Thoughts on New Jersey Resources Corp's Dividend Profile
After a thorough analysis of New Jersey Resources Corp's dividend payments, growth rate, payout ratio, profitability, and growth metrics, investors can appreciate the company's commitment to returning value to shareholders. The consistent increase in dividends paints a picture of a company with a strong dividend culture, while the payout ratio and profitability rank indicate a balance between rewarding shareholders and investing in future growth. Although some growth metrics may lag behind global competitors, the overall outlook suggests a company with a solid foundation for sustaining its dividends. As value investors consider their next steps, they may ponder the strategic position of New Jersey Resources Corp within their portfolios, especially in terms of dividend income and stability.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
