Utilities might not be the most exciting stocks out there, but in today's uncertain market, their boredom is what makes them attractive. South Jersey Industries, Inc. ( SJI - Snapshot Report ) is a great choice for investors looking for some stability.

The company offers strong growth prospects and pays a dividend that yields 2.7%. Valuation is reasonable too with shares trading in-line with the industry average.

It has also been seeing an increase in earnings estimates over the last several months. SJI is a Zacks #2 Rank (Buy) stock.

Company Description

South Jersey Industries, Inc. operates several different utilities, its largest being South Jersey Gas Company (SJG). SJG purchases, transmits, and sells natural gas for residential, commercial and industrial use.

It was founded in 1910 and has a market cap of $1.6 billion.

Second Quarter Results

South Jersey reported its results for the second quarter on August 8. Total operating revenues rose 6% to $160.477 million. The company's customer base grew 1% year-over-year as households converted to natural gas from other fuel sources. Management expects this trend to continue.

Adjusted earnings per share came in at 20 cents, missing the Zacks Consensus Estimate by 8 cents. It looks like the miss was due more to a timing issue related to the company's 2010 rate case than anything else. This effectively shifted more earnings into the first and fourth quarters of the year from the second and third quarters.

Outlook

Despite the earnings miss, management reaffirmed its EPS growth target of 9-15% for 2011. The company went on to state that its "goal remains to grow long-term Economic Earnings and its dividend by an average of at least 6 percent to 7 percent annually beyond 2011." The company has had this goal since 2006, and so far it has significantly outperformed it.

Based on consensus estimates, analysts are predicting double-digit EPS growth over the next two years. The Zacks Consensus Estimate for 2011 is $3.01, representing 11% growth over 2010 EPS. The 2012 consensus estimate is 10% higher at $3.31.

Although utilities may not be the most exciting stocks, at least they're stable. You can expect these earnings estimates to remain relatively steady even if the U.S. economy is headed for another recession.

South Jersey reports its results for the third quarter on November 8. The consensus estimate is currently $0.06 per share.

Dividend

In addition to solid earnings growth, South Jersey pays a dividend that yields a stellar 2.7%. The company has been steadily raising its dividend over the last decade, at an average annual rate of 7%:

Valuation

The valuation picture looks reasonable for South Jersey. Shares trade at 17.7x 2011 earnings, in-line with the industry average.

Its price to book ratio of 2.6 is a premium to the peer group of 2.1, but this seems justified given the company's superior return on equity.

The Bottom Line

South Jersey offers investors stability in an uncertain market. With solid growth projections and a stellar 2.7% dividend yield, it offers upside potential too.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Co-Editor of the Reitmeister Value Investor.