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Why New Jersey Resources (NJR) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
New Jersey Resources in Focus
Headquartered in Wall Township, New Jersey Resources (NJR - Free Report) is a Utilities stock that has seen a price change of 15.61% so far this year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 3.24%. In comparison, the Utility - Gas Distribution industry's yield is 3.08%, while the S&P 500's yield is 1.35%.
Looking at dividend growth, the company's current annualized dividend of $1.33 is up 4.7% from last year. New Jersey Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.28%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, New Jersey Resources's payout ratio is 49%, which means it paid out 49% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NJR expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $2.07 per share, representing a year-over-year earnings growth rate of 0.49%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that NJR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why New Jersey Resources (NJR) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
New Jersey Resources in Focus
Headquartered in Wall Township, New Jersey Resources (NJR - Free Report) is a Utilities stock that has seen a price change of 15.61% so far this year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 3.24%. In comparison, the Utility - Gas Distribution industry's yield is 3.08%, while the S&P 500's yield is 1.35%.
Looking at dividend growth, the company's current annualized dividend of $1.33 is up 4.7% from last year. New Jersey Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.28%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, New Jersey Resources's payout ratio is 49%, which means it paid out 49% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NJR expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $2.07 per share, representing a year-over-year earnings growth rate of 0.49%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that NJR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).