Utilities are riding high these days. The index of all utilities is in the mid $400’s. I remember early in my investing career the same scenario when utility company stocks prices were very high. I also remember when the index of their prices was in the mid 170’s. That means that utility stock prices not only could but also will moderate in the future. I am not a stock market timer, as you know. I kept most of my utilities through thick and thin reinvesting the dividend during times when the stock price was low and cashing those dividends when the stock price is high.
What should be the distinguishing quality between two utility choices? Of course, the dividend has to be above three percent. When a utility has also raised the dividend every year for at least five years, my interest in that stock increases. When a utility has always earned more per share than it pays out in dividend, I am tempted to include it in the dividend machine list. Then when I find a utility with little debt, I can include it in my 2012 dividend machine list.
New Jersey Resources (NJR) is a gas utility that is not limited to New Jersey. NJR provides gas utility services from the Gulf States up to New England. Their most recent financial report was very strong. And NJR is my dividend machine for this week.
The table below presents NJR’s dividend machine criteria. The dividend yield at today’s price of about $46.03 is 3.3 %; their previous four quarters earnings were $2.99 per share; their previous four quarters dividends were $1.48 and their D/E (debt to equity ratio) of .73 is below the industry average.
| New Jersey Resources (NJR) | |
| | |
| Price when profiled | $40.03 |
| Last 4 Qtrs Earnings | $2.99 |
| Last 4 Qtrs Dividend | $1.48 |
| Current Dividend Yld | 330.00% |
| No. of Years increased | 16 |
| Debt/Equity ratio | 0.73% |
As you build your dividend machine portfolio, you might consider NJR as one of the utilities.
Very Truly Yours,
TheMoneyMadam
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