NEW JERSEY RESOURCES CORP (NJR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NJR - US6460251068 - Common Stock
48.66 USD
-0.28 (-0.57%)
Overall NJR gets a fundamental rating of 4 out of 10. We evaluated NJR against 14 industry peers in the Gas Utilities industry. While NJR has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, NJR is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year NJR was profitable.
- In the past year NJR had a positive cash flow from operations.
- In the past 5 years NJR has always been profitable.
- In the past 5 years NJR always reported a positive cash flow from operatings.
1.2 Ratios
- With a decent Return On Assets value of 4.43%, NJR is doing good in the industry, outperforming 71.43% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 14.03%, NJR is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
- NJR has a Return On Invested Capital (4.97%) which is in line with its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for NJR is in line with the industry average of 6.27%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.43% | ||
| ROE | 14.03% | ||
| ROIC | 4.97% |
ROA(3y)4.21%
ROA(5y)3.82%
ROE(3y)13.5%
ROE(5y)12.57%
ROIC(3y)5.25%
ROIC(5y)5.16%
1.3 Margins
- NJR's Profit Margin of 16.48% is amongst the best of the industry. NJR outperforms 85.71% of its industry peers.
- NJR's Profit Margin has improved in the last couple of years.
- NJR has a Operating Margin of 22.13%. This is in the better half of the industry: NJR outperforms 71.43% of its industry peers.
- In the last couple of years the Operating Margin of NJR has grown nicely.
- NJR has a worse Gross Margin (55.84%) than 64.29% of its industry peers.
- In the last couple of years the Gross Margin of NJR has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.13% | ||
| PM (TTM) | 16.48% | ||
| GM | 55.84% |
OM growth 3Y16.52%
OM growth 5Y13.56%
PM growth 3Y20.33%
PM growth 5Y14.59%
GM growth 3Y19.25%
GM growth 5Y10.95%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NJR is destroying value.
- NJR has more shares outstanding than it did 1 year ago.
- Compared to 5 years ago, NJR has more shares outstanding
- NJR has a better debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.27, we must say that NJR is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.27, NJR is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
- A Debt/Equity ratio of 1.44 is on the high side and indicates that NJR has dependencies on debt financing.
- The Debt to Equity ratio of NJR (1.44) is worse than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.27 |
ROIC/WACC0.78
WACC6.39%
2.3 Liquidity
- NJR has a Current Ratio of 0.73. This is a bad value and indicates that NJR is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a decent Current ratio value of 0.73, NJR is doing good in the industry, outperforming 64.29% of the companies in the same industry.
- NJR has a Quick Ratio of 0.73. This is a bad value and indicates that NJR is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.40, NJR is doing worse than 64.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.4 |
3. Growth
3.1 Past
- NJR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.53%, which is quite good.
- The Earnings Per Share has been growing by 9.71% on average over the past years. This is quite good.
- NJR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.35%.
- NJR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.83% yearly.
EPS 1Y (TTM)11.53%
EPS 3Y9.44%
EPS 5Y9.71%
EPS Q2Q%-82.02%
Revenue 1Y (TTM)13.35%
Revenue growth 3Y-11.18%
Revenue growth 5Y0.83%
Sales Q2Q%-15.08%
3.2 Future
- Based on estimates for the next years, NJR will show a small growth in Earnings Per Share. The EPS will grow by 6.25% on average per year.
- NJR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.64% yearly.
EPS Next Y-4.12%
EPS Next 2Y2.03%
EPS Next 3Y4.85%
EPS Next 5Y6.25%
Revenue Next Year15.93%
Revenue Next 2Y10.52%
Revenue Next 3Y6.55%
Revenue Next 5Y5.64%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 14.79, which indicates a correct valuation of NJR.
- 71.43% of the companies in the same industry are more expensive than NJR, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of NJR to the average of the S&P500 Index (28.82), we can say NJR is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 15.43, NJR is valued correctly.
- NJR's Price/Forward Earnings ratio is in line with the industry average.
- NJR's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.79 | ||
| Fwd PE | 15.43 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, NJR is valued a bit more expensive than the industry average as 71.43% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.04 |
4.3 Compensation for Growth
- The decent profitability rating of NJR may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.52
EPS Next 2Y2.03%
EPS Next 3Y4.85%
5. Dividend
5.1 Amount
- NJR has a Yearly Dividend Yield of 3.93%.
- Compared to an average industry Dividend Yield of 3.96, NJR has a dividend in line with its industry peers.
- NJR's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.93% |
5.2 History
- On average, the dividend of NJR grows each year by 7.28%, which is quite nice.
- NJR has been paying a dividend for at least 10 years, so it has a reliable track record.
- NJR has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.28%
Div Incr Years29
Div Non Decr Years34
5.3 Sustainability
- 53.65% of the earnings are spent on dividend by NJR. This is a bit on the high side, but may be sustainable.
- The dividend of NJR is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP53.65%
EPS Next 2Y2.03%
EPS Next 3Y4.85%
NEW JERSEY RESOURCES CORP / NJR FAQ
What is the fundamental rating for NJR stock?
ChartMill assigns a fundamental rating of 4 / 10 to NJR.
What is the valuation status for NJR stock?
ChartMill assigns a valuation rating of 3 / 10 to NEW JERSEY RESOURCES CORP (NJR). This can be considered as Overvalued.
How profitable is NEW JERSEY RESOURCES CORP (NJR) stock?
NEW JERSEY RESOURCES CORP (NJR) has a profitability rating of 7 / 10.
How financially healthy is NEW JERSEY RESOURCES CORP?
The financial health rating of NEW JERSEY RESOURCES CORP (NJR) is 1 / 10.
What is the earnings growth outlook for NEW JERSEY RESOURCES CORP?
The Earnings per Share (EPS) of NEW JERSEY RESOURCES CORP (NJR) is expected to decline by -4.12% in the next year.