New Jersey Resources' (NYSE:NJR) 33% Return: A Closer Look

New Jersey Resources (NYSE:NJR) investors have reason to celebrate, with the company's stock returning a notable 33% over the last three years. This impressive performance can be attributed to several key factors that have contributed to NJR's success and are likely to remain sustainable in the long term.

Firstly, NJR has consistently increased its dividend, with a 7.5% annual growth rate over the past five years. The current dividend yield of 3.75% is attractive and well-covered by earnings, with a payout ratio of 60.41%. This dividend growth and yield are likely to continue, as NJR has a strong track record of increasing dividends and a commitment to maintaining a high dividend payout.

Secondly, NJR's core natural gas distribution business is regulated, providing stable and predictable earnings. This regulatory structure allows NJR to pass on costs to customers and maintain a consistent revenue stream. As a regulated utility, NJR is less exposed to market fluctuations and more focused on long-term growth and sustainability.

NJR's investment in clean energy projects, such as solar and wind energy, positions the company to capitalize on the growing demand for renewable energy. This diversification into clean energy sources reduces NJR's exposure to commodity price fluctuations and supports long-term growth.

NJR's energy efficiency programs, such as the $15 million program approved in 2024, help customers reduce energy consumption and generate additional revenue streams. These programs also contribute to NJR's sustainability goals and enhance customer satisfaction, leading to improved customer retention and growth.

In conclusion, New Jersey Resources' (NYSE:NJR) 33% return over the last three years can be attributed to several key factors, including dividend growth, a stable and predictable earnings stream, investment in clean energy projects, and energy efficiency programs. These factors have contributed to NJR's strong performance and are likely to remain sustainable in the long term, making it an attractive investment opportunity for investors.