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New Jersey Resources (NJR) is a Top Dividend Stock Right Now: Should You Buy?
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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 when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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 5.6% so far this year. Currently paying a dividend of $0.39 per share, the company has a dividend yield of 2.98%. In comparison, the Utility - Gas Distribution industry's yield is 2.94%, while the S&P 500's yield is 1.57%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.56 is up 5.5% from last year. New Jersey Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.55%. 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. New Jersey Resources's current payout ratio is 53%. This means it paid out 53% of its trailing 12-month EPS as dividend.
NJR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.55 per share, with earnings expected to increase 2% 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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that NJR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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New Jersey Resources (NJR) is a Top Dividend Stock Right Now: Should You Buy?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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 5.6% so far this year. Currently paying a dividend of $0.39 per share, the company has a dividend yield of 2.98%. In comparison, the Utility - Gas Distribution industry's yield is 2.94%, while the S&P 500's yield is 1.57%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.56 is up 5.5% from last year. New Jersey Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.55%. 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. New Jersey Resources's current payout ratio is 53%. This means it paid out 53% of its trailing 12-month EPS as dividend.
NJR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.55 per share, with earnings expected to increase 2% 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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that NJR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).