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Reasons to Add New Jersey Resources (NJR) to Your Portfolio

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New Jersey Resources’ (NJR - Free Report) strategic investments to expand natural gas transmission and distribution pipelines will allow it cater to the demand of the expanding customer base. Stable dividend and strong earnings growth make it a solid case for investment in the gas distribution space.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock, which currently has a VGM Score of B, 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

The Zacks Consensus Estimate for fiscal 2022 and fiscal 2023 earnings indicates an increase of 0.5% and 0.4%, respectively, in the past 30 days. Fiscal 2022 and fiscal 2023 earnings estimates suggests year-over-year growth of 5.1% and 7.3%, respectively.

Return on Equity (ROE)

ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12 months for New Jersey Resources is 12.16% compared with the sector’s 9%.

Systematic Investments

New Jersey Resources makes consistent investments to upgrade and maintain the existing infrastructure for providing 24x7 reliable services to the customer base. The company has plans to invest $1.3-$1.5 billion in the fiscal 2022-2023 time period to strengthen its natural gas infrastructure and make investments in utility-scale solar projects.

New Jersey Resources announced its emission reduction target and aims to cut emissions by 100% by 2050 from 2006 levels.

Long-Term Earnings Growth & Dividend Yield

New Jersey Resources’ long-term (three to five years) earnings growth is currently pegged at 7.1%.

Utility companies generally distribute dividends. Currently, the company has a dividend yield of 3.7% compared with the industry’s 2.8%.

Price Performance

In the past three months, the stock has gained 7.2% compared with the industry’s growth of 6.6%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Stocks to Consider

Other top-ranked stocks in the Zacks Utilities sector include Pampa Energia (PAM - Free Report) , IDACORP Inc. (IDA - Free Report) and Atmos Energy (ATO - Free Report) , each holding a Zacks Rank #2.

The long-term (three to five years) earnings growth of Pampa Energia, IDACORP, and Atmos Energy is projected at 49.9%, 4.4%, and 7.3%, respectively. Pampa Energia, IDACORP, and Atmos Energy delivered an earnings surprise of 141.2%, 5.2%, and 6.5%, respectively, on average, in the last four quarters.

The Zacks Consensus Estimate for 2022 earnings per share of Pampa Energia and IDACORP has moved up 10.2% and 1%, respectively, in the past 60 days. Atmos Energy’s fiscal 2022 estimates have moved up 0.7% in the past 60 days.