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Reasons to Add New Jersey Resources (NJR) to Your Portfolio

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·3 min read
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New Jersey Resources NJR is a natural gas utility having more than 7,500 miles of transportation and distribution pipelines. The company operates in an area having a growing population, which is boosting its customer base.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock, which currently has a VGM Score of B, a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projections & Surprise History

The Zacks Consensus Estimate for fiscal 2021 earnings per share is pegged at $2.02, which indicates an increase of 16.8% in the past 60 days.

New Jersey Resources’ trailing two-quarter earnings surprise is 27.4%, on average.

Return on Equity (ROE)

ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12 months for New Jersey Resources is 14.72% compared with the industry’s 12.67%.

Systematic Investments

New Jersey Resources makes consistent investments to upgrade and maintain the existing infrastructure for providing 24x7 reliable services to the customer base. The company has plans to invest $2.6 billion in the fiscal 2021-2024 time period to strengthen its natural gas infrastructure and make investment in utility scale solar projects.

New Jersey Resources announced its emission reduction target and aims to cut emissions by 60% by 2030 from 2006 levels.

Long-Term Earnings Growth & Dividend Yield

New Jersey Resources’ long-term (three to five years) earnings growth is currently pegged at 7.1%.

Utility companies generally distribute dividends. Currently, the company has a dividend yield of 3.1% compared with the industry’s 2.7%.

Debt Position

Debt to capital is a good indicator of the financial position of a company. The indicator shows how much debt is used to run the business. New Jersey Resources has a debt to capital of 55.8% compared with the industry average of 53.2%.

Its times interest earned ratio at the end of second-quarter fiscal 2021 was 4.9, which indicates that the company has enough financial strength to meet its debt obligations.

Price Performance

In the past 12 months, the stock has gained 21% compared with the industry’s growth of 8.5%.

Zacks Investment Research
Zacks Investment Research

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Other Stocks to Consider

Other top-ranked stocks in the same space include MGE Energy Inc. MGEE, Hawaiian Electric Industries HE and UGI Corporation UGI, each currently holding a Zacks Rank #2.

MGE Energy, Hawaiian Electric and UGI Corp.’s long-term (three to five years) earnings growth is currently pegged at 5.9%, 7.1% and 8%, respectively.

The Zacks Consensus Estimate for 2021 earnings for MGE Energy and Hawaiian Electric has moved up 0.3% and 8.8%, respectively, in the past 60 days. In the same time frame, the Zacks Consensus Estimate for fiscal 2021 earnings for UGI Corp. has moved up 3.4%.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Hawaiian Electric Industries, Inc. (HE) : Free Stock Analysis Report

UGI Corporation (UGI) : Free Stock Analysis Report

NewJersey Resources Corporation (NJR) : Free Stock Analysis Report

MGE Energy Inc. (MGEE) : Free Stock Analysis Report

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Zacks Investment Research