Reasons to Add New Jersey Resources (NJR) to Your Portfolio
New Jersey Resources Corp.’s NJR systematic long-term investment plans will increase the safety and reliability of its natural gas pipeline distribution and transportation systems, and drive its performance. The company will benefit from its focus on clean energy and a stable financial position.
Let’s explore the factors that make this Zacks Rank #1 (Strong Buy) company a strong investment pick at the moment.
Growth Projections
New Jersey Resources’ long-term (three to five-year) earnings growth is pegged at 6%.
The Zacks Consensus Estimate for NJR’s 2023 earnings per share (EPS) is pegged at $2.69, indicating a year-over-year improvement of 7.6%.
The consensus estimate for 2024 EPS stands at $2.76, suggesting a year-over-year improvement of 2.6%.
The stock delivered an average earnings surprise of 120.75% in the previous four quarters.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, New Jersey Resources’ ROE is 14.5%, which is higher than the industry’s average of 10.7%. This indicates that the company has been utilizing its funds more effectively than its peers in the electric power utility industry.
Debt Position
NJR’s time-to-interest earned ratio at the end of Jun 30, 2023, was 3.87. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
New Jersey Resources continues to increase shareholders’ value through dividend payments. In September 2023, its board of directors approved a 7.7% increase in dividend rate. The new quarterly dividend stands at 42 cents per share. The dividend for fiscal 2024 is $1.68 per share, indicating a 5.7% increase from the previous year’s level.
Its current dividend yield is 3.86%, better than the Zacks S&P 500 Composite’s 1.72%.
Systematic Investments & Clean Energy
NJR’s long-term capital expenditure plan will further strengthen its infrastructure and operations. The company plans to invest a total of $1.1-$1.4 billion in fiscal 2023 and 2024. This will support a net financial earnings per share growth target of 7-9%.
New Jersey Resources aims to achieve net zero by 2050. With the Coastal Climate Initiative, the company plans to spend up to $2 million over the next five years. NJR’s Clean Energy Ventures owns and operates around 462 megawatts (MW) of solar projects, with 75 MW new in-service during fiscal 2023. By fiscal 2027, the company expects a total portfolio of 1.7 gigawatts.
Price Performance
In the past year, shares of NJR have gained 1% against the broader industry’s 7.6% decline.
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Other Stocks to Consider
A few other top-ranked stocks from the same sector are Vistra Corp. VST and Consolidated Water Co. Ltd. CWCO, each sporting a Zacks Rank #1, and Sempra Energy SRE, holding a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VST’s 2023 EPS indicates a year-over-year improvement of 220.4%. The same for sales indicates a year-over-year increase of 47.8%.
CWCO’s long-term earnings growth rate is 8%. The Zacks Consensus Estimate for the company’s 2023 sales indicates year-over-year growth of 53.2%.
SRE’s long-term earnings growth rate is 5%. The Zacks Consensus Estimate for the company’s 2023 sales indicates year-over-year growth of 23.6%.
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Sempra Energy (SRE) : Free Stock Analysis Report
Consolidated Water Co. Ltd. (CWCO) : Free Stock Analysis Report
NewJersey Resources Corporation (NJR) : Free Stock Analysis Report
Vistra Corp. (VST) : Free Stock Analysis Report
