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Reasons to Add South Jersey Industries (SJI) to Your Portfolio

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South Jersey Industries (SJI - Free Report) aims to strengthen infrastructure and efficiently serve customers through strategic capital investments. Its improving earnings estimates and steady dividend payouts make a strong case for investment in the utility space.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projection & Surprise History

The Zacks Consensus Estimate for 2022 and 2023 earnings per share has moved up 6.2% and 4.2% year over year, respectively.

South Jersey Industries delivered an average earnings surprise of 2.2% in the last four quarters.

Dividend

Currently, SJI has a dividend yield of 3.6% compared with the industry’s 2.8%. SJI has a long history of 71 years of dividend payout and has raised annual dividends for 22 consecutive years. The company targets a dividend payout ratio in the range of 55-65%.

The annual dividend for 2022 is $1.24 per share, which represents a 1.6% increase from 2021. South Jersey Industries’ stable performance has allowed it to distribute dividends to shareholders at regular intervals.

Investments in Infrastructure

South Jersey Industries makes consistent investments to upgrade and maintain the existing infrastructure as well as expand operations. These investments will increase the reliability of services and enable it to serve the increasing customer base effectively.

South Jersey Industries estimates capital expenditure plans for 2022, 2023 and 2024 to be $849.4 million, $793.4 million and $911.7 million, respectively.

Steady Customer Growth

South Jersey Industries continues to expand the customer base, which will drive demand for its services. In 2021, SJI was able to add more than 10,000 new customers to the customer base, with the majority of them converted from heating oil or propane.

As of Jun 30, 2022, the company added nearly 11,600 new customers over the last 12 months and currently serves nearly 720,000 customers.

Price Performance

In the past year, the stock has rallied 45.5% compared with the industry’s growth of 21.3%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

Some other similar-ranked stocks from the same sector include Atmos Energy (ATO - Free Report) , Alliant Energy (LNT - Free Report) and NextEra Energy (NEE - Free Report) .

The long-term earnings growth of Atmos Energy, Alliant Energy and NextEra Energy is projected at 7.5%, 6.2% and 9.7%, respectively.

The Zacks Consensus Estimate for 2022 earnings per share of Atmos Energy, Alliant Energy and NextEra Energy has moved up 8.8%, 6.5% and 13.3%, respectively, year over year.

ATO, LNT and NEE delivered an average earnings surprise of 1.5%, 5.8% and 5.5%, respectively, in the last four quarters.

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