NYSE:NJR
NEW JERSEY RESOURCES CORP
A financially robust resource corporation demonstrating consistent top-line growth and improving profitability through diversified operational streams.
Key Metrics
Investment Thesis
Bull Case
NJR presents a compelling growth story with revenue expanding at a healthy clip while net income rises from $264.7 million to $335.6 million over five years. The company's massive asset base and strong operating cash flow provide a solid foundation for future expansion and shareholder returns via dividends. Investors seeking exposure to the resource sector can find value in NJR's consistent profitability improvement and disciplined capital allocation.
Bear Case
The stock carries significant weight due to its $4.41 billion in long-term liabilities, which could become a burden if interest rates rise or cash flow slows. The substantial retained earnings deficit signals that the company may have relied on equity issuance to fund operations rather than organic growth or retained profits. Market volatility in the resource sector combined with non-operating losses poses a risk to the stability of future earnings forecasts.
About NEW JERSEY RESOURCES CORP
NEW JERSEY RESOURCES CORP (NJR) is a diversified resources corporation generating substantial revenue through its core operational segments. The company leverages significant long-term assets to deliver strong cash flow from operations while managing a robust balance sheet. Its financial performance reflects steady growth in both revenue and net income over the last five years.
Analysis
Management Discussion
Management has successfully navigated recent challenges to deliver a $466.3 million cash flow from operations, significantly outpacing the $335.6 million net profit. The company continues an aggressive growth trajectory with revenue climbing from $1.11 billion in 2023 to $1.35 billion in 2025, supported by strategic asset deployment. Despite a substantial increase in long-term liabilities, the firm maintains positive working capital changes and generates sufficient liquidity to cover its dividend obligations.
Industry Overview
The resources industry is characterized by capital-intensive operations requiring massive long-term asset investments to extract and process commodities. Companies in this space often face cyclical demand patterns linked to global economic health and commodity price fluctuations. Firms like NJR must balance high leverage with operational efficiency to survive downturns while capturing upside during boom periods.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $1.11B | $1.23B | $1.35B |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $1.11B | $1.23B | $1.35B |
| Operating Expenses | $704.5M | $771.8M | $842.4M |
| Operating Income | $407.0M | $458.1M | $508.9M |
| Stock-Based Comp | $14.7M | $16.0M | $17.8M |
| D&A | $152.9M | $166.6M | $188.8M |
| Non-Operating Income | $-96.9M | $-88.7M | $-82.4M |
| Interest Expense | $123.0M | — | — |
| Interest Income | $8.9M | $8.7M | — |
| Pre-Tax Income | $310.1M | $369.4M | $426.5M |
| Income Tax | $49.3M | $84.9M | $97.0M |
| Continuing Ops | $260.8M | $284.5M | $329.6M |
| Discontinued Ops | $3.9M | $5.3M | $6.1M |
| Net Income | $264.7M | $289.8M | $335.6M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $264.7M | $289.8M | $335.6M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $532.1M | $554.6M | $569.9M |
| Cash & Equivalents | $954.0K | $1.0M | $591.0K |
| Other Current Assets | $531.1M | $553.6M | $569.3M |
| Long-Term Assets | $6.01B | $6.43B | $7.01B |
| Intangibles | $77.0K | — | — |
| Operating Leases | $175.7M | $184.5M | $185.6M |
| Other LT Assets | $5.73B | $6.14B | $6.72B |
| Total Assets | $6.54B | $6.98B | $7.58B |
| Current Liabilities | $806.6M | $887.8M | $780.9M |
| Accounts Payable | $151.8M | $169.2M | $204.5M |
| Current Leases | $4.8M | $4.9M | $4.4M |
| Deferred Revenue | $61.4M | $21.6M | $22.6M |
| Taxes Payable | $10.1M | $10.6M | $11.7M |
| Other Current Liab | $578.5M | $681.4M | $489.9M |
| Long-Term Liabilities | $3.74B | $3.89B | $4.41B |
| LT Operating Leases | $148.0M | $159.3M | $159.1M |
| Other LT Liab | $3.59B | $3.73B | $4.25B |
| Total Liabilities | $4.55B | $4.78B | $5.19B |
| Shareholders' Equity | $1.99B | $2.20B | $2.39B |
| Retained Earnings | $1.18B | $1.30B | $1.45B |
| AOCI | $-10.0M | $-6.5M | $-11.5M |
| Total L&E | $6.54B | $6.98B | $7.58B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $264.7M | $289.8M | $335.6M |
| Non-Cash Adjustments | $268.0M | $81.6M | $88.4M |
| Working Capital Changes | $-53.7M | $56.1M | $42.4M |
| Cash from Operations | $479.0M | $427.4M | $466.3M |
| Cash from Investing | $-538.6M | $-569.1M | $-568.3M |
| Share Buybacks | $0 | — | — |
| Dividends Paid | $151.0M | $165.1M | $180.1M |
| Cash from Financing | $59.7M | $141.8M | $102.0M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $65.0K | $95.0K | $37.0K |
| Beginning Cash | $1.5M | $1.5M | $1.6M |
| Ending Cash | $1.5M | $1.6M | $1.6M |
Frequently Asked Questions
How does NEW JERSEY RESOURCES CORP make money?
The company's revenue is primarily driven by its core resource extraction and processing operations, supported by substantial long-term assets. Additional revenue streams likely include commodity trading or related services, evidenced by the significant cash flow from financing activities and investment in joint ventures. The financial structure suggests a focus on high-value asset deployment within the resource sector.
What are the main risks for NJR?
Investors should monitor the significant $4.41 billion in long-term liabilities which could expose the company to refinancing risk if market conditions deteriorate. The large retained earnings deficit suggests historical challenges or aggressive equity issuance that warrants scrutiny regarding future dilution. Heavy reliance on commodity prices and operational leverage inherent in resource extraction creates volatility in earnings potential. High levels of other non-operating losses indicate potential exposure to market fluctuations or foreign exchange impacts.
What is NJR's competitive advantage?
The firm possesses a formidable moat through its massive $7.01 billion portfolio of long-term assets that provide operational scale and cost efficiency. Strong operating cash flow generation allows for consistent dividend payments and strategic reinvestment without relying heavily on external financing. The company's ability to grow net income year-over-year indicates effective management of working capital and expense control.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.