New Jersey Resources ( NJR Quick Quote NJR - Free Report) provides safe and reliable natural gas and clean energy services, including transportation, distribution, asset management and home services. The company expects to grow in the new and existing markets through its resources. It also expects demographic changes in its service territory, resulting in customer growth. Given its dividend growth and opportunities, NJR makes for a solid investment option in the utility sector. 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 Projections & Earnings Surprise
The Zacks Consensus Estimate for 2023 earnings per share (EPS) has moved up 2.82% in the past 30 days to $2.55. This implies a year-over-year increase of 2%.
Long-term (three- to five-year) earnings growth of New Jersey Resources is pegged at 6%. NJR reported fiscal first-quarter 2023 adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of 79 cents by 44.3%. Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, New Jersey Resources’ ROE is 15.62%, higher than the industry’s average of 11.44%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility gas distribution industry.
New Jersey Resources has been rewarding its shareholders for 33 years. It has increased its dividend five times on a year-over-year basis over the last five years for an average annual increase of 7.55%. Its current dividend yield is 3.08%, better than the Zacks S&P 500 Composite’s yield of 1.6%. At present, its quarterly dividend is 39 cents. The annual dividend rate is $1.56 per share, up 5.5% from the previous year.
Systematic Investments & Customer Growth
New Jersey Resources makes consistent investments to upgrade and maintain its existing infrastructure for providing 24x7 reliable services to its customers. In fiscal 2023, NJR will keep making investments to upgrade its operations and provide high-quality services to its expanding customer base.
The company added 2,132 customers in first-quarter fiscal 2023 compared with 1,730 customers in first-quarter fiscal 2022. It expects these new customers to contribute $1.8 million to the incremental utility gross margin on an annualized basis. Price Performance
Over the last three months, New Jersey Resources’ stock has returned 3.8% against the
industry’s 5.6% decline. Image Source: Zacks Investment Research Other Stocks to Consider
A few other top-ranked stocks from the same industry are
Atmos Energy ( ATO Quick Quote ATO - Free Report) , MDU Resources Group ( MDU Quick Quote MDU - Free Report) and Spire Inc. ( SR Quick Quote SR - Free Report) , each carrying a Zacks Rank #2 at present. Atmos Energy’s long-term (three- to five-year) earnings growth is pegged at 7.48%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) is $6, implying a year-over-year rise of 7.14%. MDU Resources Group’s long-term earnings growth is pegged at 5.99%. The Zacks Consensus Estimate for 2023 EPS is $2.13, implying a year-over-year increase of 13.9%. Spire Inc’s long-term earnings growth is pegged at 4.22%. The Zacks Consensus Estimate for 2023 EPS is $4.2, implying year-over-year growth of 8.81%.