New Jersey Resources NJR delivers dependable energy services to its growing customer base. With promising earnings growth potential and a sturdy return on equity (ROE), NJR emerges as a secure investment choice in the utility sector.
Now, let’s delve into the reasons that establish this Zacks Rank #2 (Buy) company as a compelling investment opportunity at the present moment.
Positive Growth Outlook & Outstanding Earnings Track Record
Over the last 90 days, the Zacks Consensus Estimate for fiscal 2024 earnings per share (EPS) has surged by 6.1% to $2.94.
New Jersey Resources has consistently surpassed earnings expectations, boasting an average surprise of 105.1% in the past four quarters.
Emphasizing Return on Equity
ROE serves as a key metric to gauge a company’s efficiency in generating returns from its capital. Presently, New Jersey Resources showcases an ROE of 11.13%, surpassing the industry average of 9.98%. This signals that the company has utilized its funds more effectively compared to peers in the utility gas distribution sector.
Robust Dividend Growth
NJR is committed to enhancing shareholder value through dividend payouts. At the moment, the quarterly dividend stands at 42 cents per share, equating to an annualized dividend of $1.68 per share. This marks a 7.7% increase from the previous figure of $1.56. With a current dividend yield of 3.91%, NJR outperforms the Zacks S&P 500 Composite’s 1.3%.
Consistent Investments & Customer Expansion
New Jersey Resources consistently channels investments into upgrading and maintaining its infrastructure to ensure round-the-clock reliable services for its customers. The company estimates capital expenditures within the range of $608-$743 million for fiscal 2024 and $578-$742 million for fiscal 2025.
In the first quarter of fiscal 2024, NJR welcomed 2,129 new customers, slightly lower than the 2,132 from the same period in fiscal 2023. These new customers are expected to contribute around $1.9 million of additional utility gross margin on an annualized basis.
Examining Price Performance
Over the past month, NJR’s stock has seen a marginal decrease of 1.4% compared to the broader sector’s decline of 5.8%.
Other Noteworthy Picks
Additionally, several other top-rated stocks from the utility sector include Atmos Energy ATO, MDU Resources MDU, and NiSource NI, each currently holding a Zacks Rank #2. You can explore the complete list of Zacks #1 Rank (Strong Buy) stocks here.
ATO’s long-term earnings growth rate stands at 7%. The company has maintained an average earnings surprise of 1.2% in the past four quarters.
MDU boasts a long-term earnings growth rate of 6%, and the Zacks Consensus Estimate for MDU’s 2024 EPS is on par with the previous year’s figure. NI reflects a long-term earnings growth rate of 6% and has an average earnings surprise of 5.6% in the last four quarters.
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For Detailed Stock Analysis
For a comprehensive stock analysis report of New Jersey Resources Corporation (NJR) and other top-ranking stocks, head over to Zacks Investment Research.
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The perspectives shared in this article are solely those of the author and do not necessarily align with those of Nasdaq, Inc.
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