Critical Survey: NewJersey Resources Corporation (NJR) and South Jersey Industries (SJI)
NewJersey Resources Corporation (NYSE: NJR) and South Jersey Industries (NYSE:SJI) are both mid-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
Earnings and Valuation
This table compares NewJersey Resources Corporation and South Jersey Industries’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NewJersey Resources Corporation||$2.20 billion||1.70||$321.77 million||$2.23||19.39|
|South Jersey Industries||$1.22 billion||2.29||$261.72 million||$1.07||32.97|
NewJersey Resources Corporation has higher revenue and earnings than South Jersey Industries. NewJersey Resources Corporation is trading at a lower price-to-earnings ratio than South Jersey Industries, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
64.2% of NewJersey Resources Corporation shares are held by institutional investors. Comparatively, 69.5% of South Jersey Industries shares are held by institutional investors. 1.5% of NewJersey Resources Corporation shares are held by company insiders. Comparatively, 0.6% of South Jersey Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
NewJersey Resources Corporation has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, South Jersey Industries has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.
This table compares NewJersey Resources Corporation and South Jersey Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NewJersey Resources Corporation||8.81%||12.77%||4.10%|
|South Jersey Industries||7.02%||7.71%||2.68%|
NewJersey Resources Corporation pays an annual dividend of $1.02 per share and has a dividend yield of 2.4%. South Jersey Industries pays an annual dividend of $1.09 per share and has a dividend yield of 3.1%. NewJersey Resources Corporation pays out 45.7% of its earnings in the form of a dividend. South Jersey Industries pays out 101.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. South Jersey Industries has increased its dividend for 21 consecutive years. South Jersey Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current recommendations and price targets for NewJersey Resources Corporation and South Jersey Industries, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NewJersey Resources Corporation||1||1||2||0||2.25|
|South Jersey Industries||0||3||3||0||2.50|
NewJersey Resources Corporation presently has a consensus price target of $39.75, suggesting a potential downside of 8.09%. South Jersey Industries has a consensus price target of $38.33, suggesting a potential upside of 8.65%. Given South Jersey Industries’ stronger consensus rating and higher possible upside, analysts clearly believe South Jersey Industries is more favorable than NewJersey Resources Corporation.
South Jersey Industries beats NewJersey Resources Corporation on 9 of the 17 factors compared between the two stocks.
About NewJersey Resources Corporation
New Jersey Resources Corporation is an energy services holding company. The Company’s business is the distribution of natural gas through a regulated utility, which provides other retail and wholesale energy services to customers and investing in clean energy projects and midstream assets. It operates in four business segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services and Midstream. The Natural Gas Distribution segment consists of regulated natural gas services, off-system sales, capacity and storage management operations. The Energy Services segment consists of unregulated wholesale energy operations. The Clean Energy Ventures segment consists of capital investments in clean energy projects. The Midstream segment consists of investments in the midstream natural gas market, such as natural gas transportation and storage facilities. The Home Services and Other operations consist of heating, cooling and water appliance sales and installations, among others.
About South Jersey Industries
South Jersey Industries, Inc. (SJI) is an energy services holding company. The Company provides a range of energy-related products and services, primarily through its subsidiaries. Its subsidiaries include South Jersey Gas Company (SJG), South Jersey Energy Company (SJE), South Jersey Resources Group, LLC (SJRG), South Jersey Exploration, LLC (SJEX), Marina Energy, LLC (Marina), South Jersey Energy Service Plus, LLC (SJESP) and SJI Midstream, LLC (Midstream). Its segments include Gas utility operations (SJG), which consist primarily of natural gas distribution; Wholesale energy operations, which include the activities of SJRG and SJEX; SJE, which is involved in both retail gas and retail electric activities; On-Site energy production, which consists of Marina’s thermal energy facility; Appliance service operations, which include SJESP, and Corporate and Services segment, which includes the activities of Midstream.
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