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Reasons to Add South Jersey Industries (SJI) to Your Portfolio

South Jersey Industries Inc. SJI — through its subsidiaries — engages in the purchase, transmission, and sale of natural gas.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock 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 & Long-Term Earnings Growth

The Zacks Consensus Estimate for 2021 and 2022 earnings per share has increased 1.8% and 2.4% to $1.71 and $1.70, respectively, in the past 60 days. Long-term (three to five years) earnings growth is currently projected at 24.5%.

Steady Customer Growth

Despite the adverse impacts of COVID-19 in 2020, the company was able to register customer growth, almost in line with previous years. In 2019, it was able to add more than 9,500 new customers to the customer base, while in 2020, the company added in excess of 12,000 customers, with more than 70% converted from heating oil or propane.

With vaccines for COVID-19 being rolled out and economic activities gradually getting back to normal levels, it expects to add more customers to the existing customer base, which will increase demand for its services and drive the bottom line.

Return on Equity & Dividend Yield

Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds to generate returns. At present, its ROE is 10.06%, higher than the industry average of 9.77%. The company’s better ROE than the industry indicates that it is using funds more efficiently than peers in the same space.

Currently, the company has a dividend yield of 4.61%, higher than the Zacks S&P 500 composite’s 1.4%.

Regular Investments

South Jersey Industries makes consistent investments to upgrade and maintain the existing infrastructure, as well as expand operations. These investments will increase the reliability of services and enable it to serve the increasing customer base effectively.

Price Performance

In the past six months, the stock has gained 13.7% compared with the industry’s growth of 8.7%.

Other Stocks to Consider

Other top-ranked stocks in the same sector include NewJersey Resource Corporation NJR, California Water Services Group CWT and MDU Resources Group MDU, each currently holding a Zacks Rank #2.

NewJersey Resource, California Water Services and MDU Resources pay regular dividends, ensuring a steady income for investors. The current dividend yield of NewJersey Resource, California Water Services and MDU Resources Group is 3.38%, 1.71%, and 2.92%, respectively.

The Zacks Consensus Estimate for 2021 earnings for California Water Services and MDU Resources Group has moved up 81.7% and 5.1%, respectively, in the past 60 days. In the same time frame, fiscal 2022 earnings estimates for NewJersey Resource have moved up 8.7%.

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South Jersey Industries, Inc. (SJI) : Free Stock Analysis Report

MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report

California Water Service Group (CWT) : Free Stock Analysis Report

NewJersey Resources Corporation (NJR) : Free Stock Analysis Report

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Zacks Investment Research