New Jersey Resources CorporationNJR

Morningstar Rating

Stock Research and Analysis

by Mark Barnett

New Jersey Resources' gas utility, New Jersey Natural Gas, has been a fine example of the consistency of performance that investors look for in a regulated utility. This company is one the best-managed and financially secure utilities we cover and enjoys Read more

Bulls Say

Population growth rates in its service area are above the national average and include the wealthier regions of New Jersey.

NJR has one of the best corporate credit ratings in the industry and maintains below-average levels of debt.

This company has been able to increase earnings without help from regular rate case filings, which is uncommon in the industry.

NJR has delivered consistent and above-average performance despite some trying times for the industry, all while maintaining an excellent financial profile. Read more

Bears Say

The company's dividend payout ratio remains relatively low despite its excellent financial health.

Population growth, the main driver behind NJR's growth during the last decade, looks to be slowing in its service area.

Increased borrowing costs and higher required rates of return for equity investors are a nasty combination for utilities, which are capital-intensive businesses.

Decreased volatility in natural gas prices would lead to much lower profits at NJR's nonregulated gas-marketing business. Read more

Strategy

NJNG received a base rate increase in 2008 for the first time in more than a decade to catch up with rising labor costs. The company plans to remain focused on its regulated utility business as the main Read more

Management

New Jersey Resources ranks relatively high in terms of shareholder stewardship. Members of management are required to own a substantial amount of shares, closely aligning their interests with shareholders'. Executive compensation is in line with what Read more

Profile

New Jersey Resources is an energy services holding company providing retail and wholesale energy services to customers in New Jersey. Its regulated utility, New Jersey Natural Read more

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