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Reasons to Add SJW Group (SJW) to Your Portfolio Right Now

SJW Group’s SJW strategic investments to strengthen its existing infrastructure and expand operations are expected to further drive its performance. The company is benefiting from its strategic water and wastewater system acquisitions. Given its growth opportunities, SJW Group makes for a solid investment option in the utility sector.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment option at the moment.

Growth Projections & Surprise History

The Zacks Consensus Estimate for 2023 earnings per share (EPS) has moved up 2.8% in the past 30 days to $2.54.

The Zacks Consensus Estimate for 2023 revenues is pinned at $650.14 million, implying a year-over-year increase of 4.7%.

The company delivered an average earnings surprise of 20.1% in the last four quarters.

Return on Equity

Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, SJW Group’s ROE is 8.53%, higher than the sector’s average of 7.33%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility sector.

Dividend Growth

SJW has been consistently paying dividends and increasing its shareholders’ value. Currently, its quarterly dividend is 38 cents per share, resulting in an annualized dividend of $1.52 per share. Its current dividend yield is 2.37%, better than the Zacks S&P 500 Composite’s 1.43%.

Systematic Investments

SJW Group remains focused on investing in its operations and remaining actively engaged in its local communities. It plans to invest more than $1.6 billion over the next five years to build and maintain its water and wastewater operations. SJW has invested $196 million year to date in infrastructure and water supply, which is approximately 77% of $255 million budgeted in 2023.

Price Performance

In the past month, the stock has returned 10.5% compared with the industry’s average 8.5% growth.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Other Stocks to Consider

A few other top-ranked stocks from the same sector are Global Water Resources GWRS, The York Water Company YORW and PPL Corporation PPL each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GWRS’ long-term (three to five years) earnings growth is 15%. The company delivered an average earnings surprise of 27.1% in the last four quarters.

The Zacks Consensus Estimate for YORW’s 2023 EPS is pegged at $1.59, implying a year-over-year improvement of 13.6%. The company delivered an average earnings surprise of 6.7% in the last four quarters.

PPL’s long-term earnings growth rate is 7.42%. The consensus estimate for the company’s 2023 EPS is pegged at $1.58, indicating a year-over-year improvement of 12.1%.

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PPL Corporation (PPL) : Free Stock Analysis Report

The York Water Company (YORW) : Free Stock Analysis Report

SJW Group (SJW) : Free Stock Analysis Report

Global Water Resources, Inc. (GWRS) : Free Stock Analysis Report

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Zacks Investment Research

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