South Jersey Industries (NYSE: SJI) and NewJersey Resources Corporation (NYSE:NJR) are both mid-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.

Earnings & Valuation

This table compares South Jersey Industries and NewJersey Resources Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
South Jersey Industries $1.22 billion 2.26 $261.72 million $1.07 32.52
NewJersey Resources Corporation $2.20 billion 1.69 $321.77 million $2.23 19.30

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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for South Jersey Industries and NewJersey Resources Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
South Jersey Industries 0 3 3 0 2.50
NewJersey Resources Corporation 1 1 2 0 2.25

South Jersey Industries presently has a consensus price target of $38.33, indicating a potential upside of 10.15%. NewJersey Resources Corporation has a consensus price target of $37.25, indicating a potential downside of 13.47%. Given South Jersey Industries’ stronger consensus rating and higher probable upside, research analysts plainly believe South Jersey Industries is more favorable than NewJersey Resources Corporation.

Profitability

This table compares South Jersey Industries and NewJersey Resources Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
South Jersey Industries 7.02% 7.71% 2.68%
NewJersey Resources Corporation 8.81% 12.77% 4.10%

Risk & Volatility

South Jersey Industries has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, NewJersey Resources Corporation has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Institutional & Insider Ownership

69.3% of South Jersey Industries shares are owned by institutional investors. Comparatively, 65.0% of NewJersey Resources Corporation shares are owned by institutional investors. 0.6% of South Jersey Industries shares are owned by company insiders. Comparatively, 1.5% of NewJersey Resources Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

South Jersey Industries pays an annual dividend of $1.09 per share and has a dividend yield of 3.1%. NewJersey Resources Corporation pays an annual dividend of $1.02 per share and has a dividend yield of 2.4%. 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. NewJersey Resources Corporation pays out 45.7% of its earnings in the form of a dividend. South Jersey Industries has raised 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.

Summary

South Jersey Industries beats NewJersey Resources Corporation on 9 of the 17 factors compared between the two stocks.

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.

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.

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