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Why New Jersey Resources (NJR) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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
New Jersey Resources (NJR - Free Report) is headquartered in Wall, and is in the Utilities sector. The stock has seen a price change of 0.02% since the start of the year. The energy services holding company is paying out a dividend of $0.39 per share at the moment, with a dividend yield of 3.14% compared to the Utility - Gas Distribution industry's yield of 3.04% and the S&P 500's yield of 1.76%.
In terms of dividend growth, the company's 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%. Looking ahead, future dividend growth will be dependent on earnings growth and 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%, meaning it paid out 53% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for NJR for this fiscal year. The Zacks Consensus Estimate for 2023 is $2.55 per share, representing a year-over-year earnings growth rate of 2%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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 also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why New Jersey Resources (NJR) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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
New Jersey Resources (NJR - Free Report) is headquartered in Wall, and is in the Utilities sector. The stock has seen a price change of 0.02% since the start of the year. The energy services holding company is paying out a dividend of $0.39 per share at the moment, with a dividend yield of 3.14% compared to the Utility - Gas Distribution industry's yield of 3.04% and the S&P 500's yield of 1.76%.
In terms of dividend growth, the company's 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%. Looking ahead, future dividend growth will be dependent on earnings growth and 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%, meaning it paid out 53% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for NJR for this fiscal year. The Zacks Consensus Estimate for 2023 is $2.55 per share, representing a year-over-year earnings growth rate of 2%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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 also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).