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New Jersey Resources Rewards Shareholders With 7.1% Dividend Hike
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New Jersey Resources (NJR - Free Report) announced that its board of directors has approved a 7.1% increase in its quarterly dividend rate. The new dividend rate will be 45 cents per share compared with the previous quarter’s 42 cents, payable on Oct. 1, 2024, to stockholders of record as of Sept. 23.
This increase resulted in an annualized dividend of $1.80 per share compared with the previous level of $1.68. The company has paid quarterly dividends continuously since its inception in 1952 and has raised the dividend every year for the past 29 years. NJR’s current dividend yield is 3.63%, higher than the Zacks S&P 500 composite's average of 1.29%.
Can NJR Stock Sustain Dividend Hikes?
New Jersey Resources makes consistent investments to upgrade and maintain its existing infrastructure. The idea is to provide reliable services to its customers around the clock. The company expects capital expenditures to be in the range of $490-$580 million and $495-$675 million for fiscal 2024 and fiscal 2025, respectively. This systematic capital expenditure is likely to support the long-term earnings growth target of 7-9%.
The company’s top line benefits from an expanding customer base. New Jersey Resources added 5,939 new customers during the first nine months of fiscal 2024 compared with 5,892 in the corresponding period of fiscal 2023. It expects these new customers to contribute nearly $5.1 million of incremental utility gross margin on an annualized basis.
The company’s Clean Energy Ventures invests in, owns and operates solar projects with a total capacity of approximately 477 megawatts (MW), providing residential and commercial customers with low-carbon solutions. In the year-to-date period of fiscal 2024, it increased capacity by nearly 8 MW. A project pipeline of nearly 873 MW is in process, which, once operational, should further boost the overall performance.
New Jersey Resources has the potential to expand and improve even further, which suggests that management will have sufficient funds to continue with its shareholder-friendly initiatives in the future.
Utilities’ Legacy of Dividend Payment
Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
In the past few months, MDU Resources (MDU - Free Report) , National Fuel Gas Company (NFG - Free Report) and Chesapeake Utilities Corp. (CPK - Free Report) have raised their quarterly dividend rate by 4%, 4% and 8.5%, respectively.
The Zacks Consensus Estimate for MDU Resources’ 2024 earnings is pegged at $1.55 per share, implying a year-over-year increase of 3.3%. MDU’s current dividend yield is 1.99%.
The Zacks Consensus Estimate for National Fuel Gas’ fiscal 2024 earnings has increased 10.1% in the past 90 days to $5.13 per share. NFG’s current dividend yield is 3.4%.
The Zacks Consensus Estimate for Chesapeake Utilities’ 2024 earnings is pegged at $5.39 per share, implying a year-over-year increase of 1.5%. CPK’s current dividend yield is 2.15%.
NJR’s Stock Price Performance
In the past three months, New Jersey Resources’ shares have risen 9.8% compared with the industry’s growth of 9.7%.
New Jersey Resources (NJR - Free Report) announced that its board of directors has approved a 7.1% increase in its quarterly dividend rate. The new dividend rate will be 45 cents per share compared with the previous quarter’s 42 cents, payable on Oct. 1, 2024, to stockholders of record as of Sept. 23.
This increase resulted in an annualized dividend of $1.80 per share compared with the previous level of $1.68. The company has paid quarterly dividends continuously since its inception in 1952 and has raised the dividend every year for the past 29 years. NJR’s current dividend yield is 3.63%, higher than the Zacks S&P 500 composite's average of 1.29%.
Can NJR Stock Sustain Dividend Hikes?
New Jersey Resources makes consistent investments to upgrade and maintain its existing infrastructure. The idea is to provide reliable services to its customers around the clock. The company expects capital expenditures to be in the range of $490-$580 million and $495-$675 million for fiscal 2024 and fiscal 2025, respectively. This systematic capital expenditure is likely to support the long-term earnings growth target of 7-9%.
The company’s top line benefits from an expanding customer base. New Jersey Resources added 5,939 new customers during the first nine months of fiscal 2024 compared with 5,892 in the corresponding period of fiscal 2023. It expects these new customers to contribute nearly $5.1 million of incremental utility gross margin on an annualized basis.
The company’s Clean Energy Ventures invests in, owns and operates solar projects with a total capacity of approximately 477 megawatts (MW), providing residential and commercial customers with low-carbon solutions. In the year-to-date period of fiscal 2024, it increased capacity by nearly 8 MW. A project pipeline of nearly 873 MW is in process, which, once operational, should further boost the overall performance.
New Jersey Resources has the potential to expand and improve even further, which suggests that management will have sufficient funds to continue with its shareholder-friendly initiatives in the future.
Utilities’ Legacy of Dividend Payment
Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
In the past few months, MDU Resources (MDU - Free Report) , National Fuel Gas Company (NFG - Free Report) and Chesapeake Utilities Corp. (CPK - Free Report) have raised their quarterly dividend rate by 4%, 4% and 8.5%, respectively.
The Zacks Consensus Estimate for MDU Resources’ 2024 earnings is pegged at $1.55 per share, implying a year-over-year increase of 3.3%. MDU’s current dividend yield is 1.99%.
The Zacks Consensus Estimate for National Fuel Gas’ fiscal 2024 earnings has increased 10.1% in the past 90 days to $5.13 per share. NFG’s current dividend yield is 3.4%.
The Zacks Consensus Estimate for Chesapeake Utilities’ 2024 earnings is pegged at $5.39 per share, implying a year-over-year increase of 1.5%. CPK’s current dividend yield is 2.15%.
NJR’s Stock Price Performance
In the past three months, New Jersey Resources’ shares have risen 9.8% compared with the industry’s growth of 9.7%.
Image Source: Zacks Investment Research
Zacks Rank
NJR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.