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New Jersey Resources (NJR) Could Be a Great Choice
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
New Jersey Resources in Focus
Headquartered in Wall, New Jersey Resources (NJR - Free Report) is a Utilities stock that has seen a price change of -0.85% so far this year. The energy services holding company is currently shelling out a dividend of $0.39 per share, with a dividend yield of 3.17%. This compares to the Utility - Gas Distribution industry's yield of 3.14% and the S&P 500's yield of 1.78%.
In terms of dividend growth, the company's current annualized dividend of $1.56 is up 5.5% from last year. In the past five-year period, New Jersey Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.50%. Future dividend growth will depend on earnings growth as well as 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 57%, which means it paid out 57% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NJR expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.64 per share, with earnings expected to increase 5.60% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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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New Jersey Resources (NJR) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
New Jersey Resources in Focus
Headquartered in Wall, New Jersey Resources (NJR - Free Report) is a Utilities stock that has seen a price change of -0.85% so far this year. The energy services holding company is currently shelling out a dividend of $0.39 per share, with a dividend yield of 3.17%. This compares to the Utility - Gas Distribution industry's yield of 3.14% and the S&P 500's yield of 1.78%.
In terms of dividend growth, the company's current annualized dividend of $1.56 is up 5.5% from last year. In the past five-year period, New Jersey Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.50%. Future dividend growth will depend on earnings growth as well as 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 57%, which means it paid out 57% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NJR expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.64 per share, with earnings expected to increase 5.60% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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).