New Jersey Resources Corporation Stock Upgraded (NJR)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- New Jersey Resources Corporation (NYSE: NJR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, growth in earnings per share and increase in net income. 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:
  • NJR's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 14.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to -$44.97 million or 41.95% when compared to the same quarter last year. Despite an increase in cash flow, NEW JERSEY RESOURCES CORP's cash flow growth rate is still lower than the industry average growth rate of 69.76%.
  • NEW JERSEY RESOURCES CORP's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEW JERSEY RESOURCES CORP reported lower earnings of $2.23 versus $2.44 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $2.23).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Gas Utilities industry average, but is greater than that of the S&P 500. The net income increased by 5.0% when compared to the same quarter one year prior, going from $57.36 million to $60.21 million.
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New Jersey Resources Corporation, an energy services holding company, provides retail and wholesale energy services. The company operates in four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Energy Holdings. The company has a P/E ratio of 18.7, above the S&P 500 P/E ratio of 17.7. New Jersey has a market cap of $1.74 billion and is part of the utilities sector and utilities industry. Shares are up 5.5% year to date as of the close of trading on Friday.

You can view the full New Jersey Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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