Tag Archives: stocks

Dividend Growth Stock Overview: New Jersey Resources Corporation

Summary New Jersey Resources provides natural gas services to over 500,000 customers in northern and central New Jersey. The company also has a growing wind and solar energy portfolio, currently totaling 147 MW of capacity. Over the last decade, the company has met its goal of compounding its dividend by 6-8% a year; the annual dividend growth rate has averaged 7.3%. New Jersey Resources has grown its dividend since 1995. The stock currently yields 3.2%. Among the areas that New Jersey Resources serves is the Jersey shore. Photo: New Jersey Resources Corporation’s 2014 Annual Report About New Jersey Resources Corporation New Jersey Resources Corporation (NYSE: NJR ) is an energy services holding company, whose primary business is the sale and distribution of natural gas to over 500,000 customers in the northern and central New Jersey. The company was formed in the early 1980s through the 1-for-1 exchange of New Jersey Natural Gas shares into the new holding corporation. In addition to the regulated natural gas business, New Jersey Resources offers other energy services to its customers and invests in midstream assets. The company’s operating area has a population of roughly 1.5 million people. (Note that one customer account usually serves more than one individual.) The company’s has four reporting business segments, which are organized roughly around its subsidiaries. The New Jersey Natural Gas Company subsidiary runs the natural gas distribution business segment, which is responsible for the regulated part of New Jersey Resources’ business: The distribution and sale of natural gas to retail customers. The Energy Services segment primarily consists of NJR Energy Services Company and is responsible for New Jersey Resources’ unregulated wholesale energy operations. The segment is also responsible for providing wholesale energy operations to other natural gas companies and energy producers. The Clean Energy Ventures segment is run by NJR Clean Energy Venture Corporation. This segment is responsible for investments in solar and onshore wind investments. This segment has a clean energy portfolio of more than 147 MW in electrical generation capacity. Finally, the Midstream segment is responsible for all of New Jersey Resources’ investments in natural gas transportation and storage facilities. NJR reports “net financial earnings” (NFE) as its primary profitability metric. NFE is the company’s earnings adjusted for commodity derivative and hedging contracts. For the 2015 fiscal year (which ended September 30, 2015), although New Jersey Resources earned $2.12 per share under generally accepted accounting principles, which was up 25% from 2014, NFE per share was $1.78, down 15.2% from 2014. New Jersey Resources seeks to increase NFE per share by 5-9% a year and the dividend 6-8% a year long term. With the current dividend of 96 cents, the payout ratio is 54%, below the company’s target range of 60-65%. Accounting for the company’s guidance of 2016 NFE per share of $1.55-$1.65, next year’s expected payout ratio is roughly 60%, before any increase. New Jersey Resources has an active share repurchase program and has repurchased 16.8 million shares since September 1996. In FY 2015, the company repurchased 348,200 shares. 2.7 million shares remain on the existing authorization, which represents 3.15% of the outstanding stock. The company is a member of the S&P 600 Small Cap and Russell 2000 indices and trades under the ticker symbol NJR. New Jersey Resources’ Dividend and Stock Split History (click to enlarge) New Jersey Resources has grown its dividend at 7.3% over the last 10 years. New Jersey Resources has paid dividends since at least 1988 and increased them since 1995. The company announces annual dividend increases in early-to-mid September, with the stock going ex-dividend about two weeks later. In September 2015, New Jersey Resources announced a 6.7% dividend increase to an annualized rate of 96 cents a share. The company should announce its 22nd consecutive annual dividend increase in September 2016. As noted above, New Jersey Resources aims to increase dividends by 6-8% a year, and targets a payout ratio of between 60% and 65%. The company has met its dividend growth target over the last decade – the 5-year and 10-year dividend growth rates are 6.15% and 7.29%. Over the last 20 years, the company has fallen short of the goal, with the dividend compounded at 5.16% annually. New Jersey Resources has split its stock three times since beginning its record of annual dividend increases. The company split its stock 3-for-2 in March 2002 and March 2008. Most recently, the company split its stock 2-for-1 in March 2015. Over the 5 years ending on June 30, 2015, New Jersey Resources’ stock appreciated at an annualized rate of 13.4%, from a split-adjusted $14.58 to $27.31. This underperformed the 15.0% compounded return of the S&P 500 index, the 17.2% return of the S&P Small Cap 600 index and the 15.7% return of the Russell 2000 index over the same period. New Jersey Resources’ Direct Purchase and Dividend Reinvestment Plans New Jersey Resources has both direct purchase and dividend reinvestment plans. You don’t need to be a current shareholder to participate in the plans – you can make your initial purchase in the plan. The minimum investment for the initial direct purchase is $100 and $25 for follow-on direct purchases. The dividend reinvestment plan allows for full or partial reinvestment of dividends. The company occasionally offers shares at up to a 3% discount through the direct purchase plan. The plan’s fee structures are favorable for investors. The company picks up the costs of buying shares through the both the direct purchase and dividend reinvestment plans. The only fees you pay through the plans are when you sell your shares. You’ll pay a commission of between $15 and $30, depending on the type of sell order, plus a transaction fee of 10 cents per share. You’ll also pay $5 to have the proceeds (net of any fees) directly deposited to your account. Helpful Links New Jersey Resources Corporation’s Investor Relations Website Current quote and financial summary for New Jersey Resources Corporation ( finviz.com ) Information on the direct purchase and dividend reinvestment plans for New Jersey Resources Corporation

Stocks That Can Double, Can Give You Trouble

Summary Every day, around 45 stocks double or more in price. That may be true, but most of those that do double or more in price don’t do so for fundamental reasons; they are often manipulated. Second, the stocks that do double in price can’t be found in advance – i.e., picking the day that the price will explode. Third, the prices more often fall hard for these tiny stocks. Fourth, for the few that rise a lot, you can’t invest in them. I haven’t written about promoted penny stocks in a long time . Tonight, I am not writing about promoted stocks, only penny stocks as promoted by a newsletter writer . He profits from the newsletter. Ostensibly, he does not front-run his readers. Before we go on, let me run the promoted stocks scoreboard: Ticker Date of Article Price @ Article Price @ 12/1/15 Decline Annualized Dead? ( OTCPK:GTXO ) 5/27/2008 2.45 0.011 -99.6% -51.5% ( OTCPK:BONZ ) 10/22/2009 0.35 0.000 -99.9% -68.5% ( OTCPK:BONU ) 10/22/2009 0.89 0.000 -100.0% -100.0% ( OTC:UTOG ) 3/30/2011 1.55 0.000 -100.0% -100.0% Dead (OBJE) 4/29/2011 116.00 0.000 -100.0% -100.0% Dead ( OTCPK:LSTG ) 10/5/2011 1.12 0.004 -99.6% -74.2% ( OTC:AERN ) 10/5/2011 0.0770 0.0001 -99.9% -79.8% ( OTC:IRYS ) 3/15/2012 0.261 0.000 -100.0% -100.0% Dead ( OTCPK:RCGP ) 3/22/2012 1.47 0.180 -87.8% -43.4% ( OTCQB:STVF ) 3/28/2012 3.24 0.070 -97.8% -64.7% ( OTCPK:CRCL ) 5/1/2012 2.22 0.001 -99.9% -87.2% ( OTCPK:ORYN ) 5/30/2012 0.93 0.001 -99.9% -85.4% ( OTCQB:BRFH ) 5/30/2012 1.16 1.000 -13.8% -4.1% ( OTCPK:LUXR ) 6/12/2012 1.59 0.002 -99.9% -86.3% ( OTCQB:IMSC ) 7/9/2012 1.5 0.495 -67.0% -27.9% ( OTCPK:DIDG ) 7/18/2012 0.65 0.000 -100.0% -100.0% ( OTCQB:GRPH ) 11/30/2012 0.8715 0.013 -98.5% -75.4% ( OTCPK:IMNG ) 12/4/2012 0.76 0.012 -98.4% -75.0% ( OTCPK:ECAU ) 1/24/2013 1.42 0.000 -100.0% -94.9% ( OTCPK:DPHS ) 6/3/2013 0.59 0.005 -99.2% -85.5% ( OTC:POLR ) 6/10/2013 5.75 0.005 -99.9% -94.2% ( OTC:NORX ) 6/11/2013 0.91 0.000 -100.0% -97.5% ( OTCQB:ARTH ) 7/11/2013 1.24 0.245 -80.2% -49.3% ( OTCPK:NAMG ) 7/25/2013 0.85 0.000 -100.0% -100.0% ( OTCPK:MDDD ) 12/9/2013 0.79 0.003 -99.7% -94.5% ( OTCPK:TGRO ) 12/30/2013 1.2 0.012 -99.0% -90.9% ( OTCQB:VEND ) 2/4/2014 4.34 0.200 -95.4% -81.6% (HTPG) 3/18/2014 0.72 0.003 -99.6% -95.9% ( OTCQB:WSTI ) 6/27/2014 1.35 0.000 -100.0% -99.9% (APPG) 8/1/2014 1.52 0.000 -100.0% -99.8% (CDNL) 1/20/2015 0.35 0.035 -90.0% -93.1% 12/1/2015 Median -99.9% -87.2% If you want to lose money, it is hard to do it more consistently than this. No winners out of 31, and only one company looks legit at all – Barfresh ( OTCQB:BRFH ). But what of the newsletter writer? He seems to have a couple of stylized facts that are misapplied. Every day, around 45 stocks double or more in price. Some wealthy investors have bought stocks like these. Wall Street firms own these stocks but never recommend them to ordinary individuals The media censors price information about these stocks so you never hear about them Every day, around 45 stocks double or more in price. That may be true, but most of those that do double or more in price don’t do so for fundamental reasons; they are often manipulated. Second, the stocks that do double in price can’t be found in advance – i.e., picking the day that the price will explode. Third, the prices more often fall hard for these tiny stocks. Of the 30 stocks mentioned above that were not dead at the time of the last article, 10 fell more than 90% over the 10+ month period. 13 fell less than 90%, 1 broke even, and 7 rose in price. The median stock fell 61%. This was during a bull market. Now you might say, “Wait, these are promoted stocks, of course they fell.” Only the last one was being actively promoted, so that’s not the answer. My fourth point is for the few that rise a lot, you can’t invest in them. The stocks that double or more in a day tend to be the smallest of the stocks. Two of the 30 stocks listed in the scoreboard rose 900% and 7100% in the 10+ month period since my last article. How much could you have invested in those stocks? You could have bought both companies for a little more than $10,000 each. Anyone waving even a couple hundred bucks could make either stock fly. So, no, these stocks aren’t a road to riches. Now the ad has stories as to how much money people made at some point buying the penny stocks. The odds of stringing several of these successful purchases in succession, parlaying the money into bigger and bigger stocks that double is remote at best, and your odds of losing a lot of it is high. This idea is a less classy version of the idea promoted in the book 100 to 1 in the Stock Market . If it is difficult to find the 100-baggers 30 years in advance, it is more difficult to find a stock that is going to double or more tomorrow, much less a bunch of them in succession. You may as well go to Vegas and bet it all on Double Zero on the roulette wheel four times in a row. The odds are about that bad, as trying to get rich buying penny stocks. The ad also lists three stock that at some point fit his paradigm – MeetMe (NASDAQ: MEET ), PlasmaTech Biopharmaceuticals, Inc. (PTBI), which is now called Abeona Therapeutics Inc. (NASDAQ: ABEO ), and Organovo (NYSEMKT: ONVO ). All of these are money-losing companies (MeetMe may be breaking into profitability now) that have survived by selling shares to raise cash. The stocks have generally been poor. Have they had volatile days where the price doubled? At some point, probably, but who could have picked the date in advance, and found liquidity to do a quick in-and-out trade? The author lists five future situations as a “come on” to get people to subscribe. I find them dubious. As for wealthy investors, he mentions two: Icahn pulling of a short squeeze on Voltari (difficult to generalize from), and Soros with PlasmaTech Biopharmaceuticals, Inc. It should be noted that Soros has a big portfolio with many stocks, and that position was far less than 1% of his assets. In general, the wealthy do not buy penny stocks. As for brokers and the media not mentioning penny stocks, that is being responsible. The brokers could get in hot water for recommending or buying penny stocks even under a weak suitability standard. The media also does not want to be blamed for inciting destructive speculation. Retail investors lose enough money through uninformed trading, why encourage them to do it where fundamentals are typically quite poor. I’ve written two other pieces on less liquid stocks to try to explain the market better: On Penny Stocks and Good Over-the-Counter “Pink” Stocks . It’s not as if there isn’t value in some of the stocks that “fly under the radar.” That said, you have to be extra careful. Near the end of the ad, the writer describes how he is being extra careful also. Many of his rules make a lot of sense. That said, following those rules will get you boring companies that won’t double or more in a day. And that’s not a bad thing. Most significant money is made slowly – it doesn’t come in a year, much less in a day. That said, I recommend against the newsletter because of the way that it tries to attract people. The rhetoric is over the top, and appeals to those who sense conspiracies keeping them from riches, so join my club where I hand out my secret knowledge so you can benefit. In summary, as a first approximation, don’t invest in penny stocks. The odds are against you. Fools rush in where angels fear to tread. Don’t let greed get the better of you – after all, what is being illustrated is an illusion that retail investors can’t generally achieve. Disclosure: None

Facebook, Amazon Among 4 Big Caps Redefining Shopping

As Black Friday video footage at retailers continues to embarrass humanity, more people have opted to shop online. That has meant only good things for Internet stocks like Amazon (AMZN), Facebook (FB), Google parent Alphabet (GOOGL) and Alibaba (BABA), all of which have grown into multibillion-dollar giants. But despite their size, all of them still have potential for growth, and that’s why they’re the focus of the Screen of the Day, Big Cap