Top 5 Mid-Caps for Nov. 20

New Jersey Resources(NJR Quote) is an energy services holding company that provides retail and wholesale energy services to customers in New Jersey, other states from the Gulf Coast to New England, and Canada. Our rating for New Jersey Resources Corporation has been in place since September 2002. This rating is supported by the company's healthy revenue growth, solid stock price performance, compelling net income growth, and impressive record of EPS growth.

For the fourth quarter of fiscal 2008, the company reported revenue growth of 40.1% year over year, which outpaced the industry average of 22.6%. Revenue growth appears to have helped boost EPS, which rose significantly from a loss of 91 cents per share in the fourth quarter of fiscal 2007 to a profit of $1.86 in the most recent quarter. Net income surged 305.1% when compared with the same quarter a year ago. In addition, the company announced that its Board of Directors recently approved a 10.7% dividend increase, bringing the quarterly dividend rate to 31 cents per share. The company has paid quarterly dividends continuously since it began in 1952.

Looking ahead to fiscal 2009, New Jersey Resources forecasts net financial earnings in the range of $2.30 to $2.40 per basic share. Approximately 30% to 40% of those earnings are expected to come from the company's wholesale energy services subsidiary, NJR Energy Services. The company shows low profit margins, but we feel that its strengths outweigh any potential weakness at this time. Strong earnings growth has helped the stock price rise over the past year, and the stock should see more upside potential unless a broad bear market prevails.