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Are You Looking for a High-Growth Dividend Stock? New Jersey Resources (NJR) Could Be a Great Choice
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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
New Jersey Resources (NJR - Free Report) is headquartered in Wall Township, and is in the Utilities sector. The stock has seen a price change of 13.84% since the start of the year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 3.29%. In comparison, the Utility - Gas Distribution industry's yield is 3.04%, while the S&P 500's yield is 1.31%.
Looking at dividend growth, the company's current annualized dividend of $1.33 is up 4.7% from last year. Over the last 5 years, New Jersey Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.01%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. New Jersey Resources's current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for NJR for this fiscal year. The Zacks Consensus Estimate for 2021 is $2.12 per share, with earnings expected to increase 2.91% from the year ago period.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NJR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? New Jersey Resources (NJR) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
New Jersey Resources (NJR - Free Report) is headquartered in Wall Township, and is in the Utilities sector. The stock has seen a price change of 13.84% since the start of the year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 3.29%. In comparison, the Utility - Gas Distribution industry's yield is 3.04%, while the S&P 500's yield is 1.31%.
Looking at dividend growth, the company's current annualized dividend of $1.33 is up 4.7% from last year. Over the last 5 years, New Jersey Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.01%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. New Jersey Resources's current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for NJR for this fiscal year. The Zacks Consensus Estimate for 2021 is $2.12 per share, with earnings expected to increase 2.91% from the year ago period.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NJR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).