Rating Change #3
South Jersey Industries
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- SOUTH JERSEY INDUSTRIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SOUTH JERSEY INDUSTRIES INC increased its bottom line by earning $2.99 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($3.06 versus $2.99).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 70.0% when compared to the same quarter one year prior, rising from $6.08 million to $10.33 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Gas Utilities industry and the overall market, SOUTH JERSEY INDUSTRIES INC's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 451.61% to $14.05 million when compared to the same quarter last year. In addition, SOUTH JERSEY INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of 42.32%.
- SJI, with its decline in revenue, underperformed when compared the industry average of 8.8%. Since the same quarter one year prior, revenues fell by 24.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
South Jersey Industries, Inc., through its subsidiaries, engages in the purchase, transmission, and sale of natural gas for residential, commercial, and industrial customers. The company has a P/E ratio of 16.2, equal to the average utilities industry P/E ratio and below the S&P 500 P/E ratio of 17.7. South Jersey has a market cap of $1.59 billion and is part of the utilities sector and utilities industry. Shares are down 9.9% year to date as of the close of trading on Tuesday.
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