Introduction & Market Context
New Jersey Resources (NYSE:NJR) has raised its fiscal 2025 net financial earnings per share (NFEPS) guidance following strong second-quarter results, according to the company’s May 2025 investor presentation. The energy infrastructure company now expects NFEPS of $3.15-$3.30, up $0.10 from previous guidance, supported by solid performance across its diversified business segments.
NJR reported Q2 2025 earnings per share of $2.04 and NFEPS of $1.78, with year-to-date NFEPS reaching $3.07. The company’s stock closed at $49.10 on May 5, 2025, with a market capitalization of approximately $4.9 billion and an annual dividend yield of 3.63%.
This guidance increase continues NJR’s trend of outperformance, as the company surpassed its NFEPS guidance for the fourth consecutive year in fiscal 2024, when it achieved $2.95 NFEPS compared to $2.70 in the previous year.
Quarterly Performance Highlights
NJR’s second quarter showed significant improvement across its business segments, with consolidated net financial earnings (NFE) reaching $178.3 million, up from $138.6 million in Q2 2024. Year-to-date NFE totaled $307.2 million, compared to $211.0 million in the same period last year.
As shown in the following detailed breakdown of financial results by segment:
New Jersey Natural Gas (NJNG), the company’s utility business, remains the largest contributor to earnings, accounting for 65-68% of fiscal 2025 NFEPS. NJNG benefited from its first full quarter of new rates following a base rate case settlement and continued customer growth, with its customer base expanding to approximately 588,000.
The Clean Energy Ventures (CEV) segment has placed approximately 31MW of solar capacity into service in FY 2025, with an additional 60MW under construction. CEV now has a project pipeline exceeding 1GW, supporting NJR’s position as the largest solar owner-operator in New Jersey.
The following chart illustrates how NJR has increased its NFEPS guidance for fiscal 2025, building on consistent growth in recent years:
Business Mix and Segment Contributions
NJR’s diversified business model provides stability through its regulated utility operations while offering growth opportunities through clean energy investments and midstream assets. The company’s earnings mix demonstrates this balance, with utility operations contributing over 65% of fiscal 2025 NFEPS.
The following pie chart shows the expected contribution from each business segment to fiscal 2025 NFEPS:
NJNG continues to demonstrate steady customer growth, adding approximately 40,000 customers since 2019. Year-to-date capital expenditures for NJNG total approximately $254 million, with significant investments in the SAVEGREEN program ($52 million) and system integrity ($87 million).
Clean Energy Ventures currently owns and operates approximately 417MW of commercial solar capacity across multiple states. The segment’s growth strategy focuses on states with favorable regulatory environments and projects meeting high single-digit unlevered return criteria.
As illustrated in the following chart, CEV has a robust pipeline of solar projects extending several years into the future:
Strategic Initiatives and Capital Plan
NJR has outlined an ambitious capital plan to support its long-term growth targets, with planned expenditures of approximately $1.3-$1.6 billion over the next two years. This investment strategy is designed to maintain the company’s 7-9% long-term NFEPS growth target without requiring block equity issuances.
The following chart details NJR’s capital plan across its business segments:
For NJNG, key initiatives include continued customer growth, energy efficiency efforts through the SAVEGREEN program, and system integrity investments. The utility operates in a favorable regulatory environment with decoupled rates for the majority of customers and margin sharing incentives.
In the Storage and Transportation segment, NJR is progressing with the Adelphia Rate Case and assessing potential new cavern expansion at its Leaf River facility. The company’s Leaf River Energy Center includes a 32.2 mmdth high-deliverability salt cavern storage facility, while Adelphia Gateway is a 0.9 mmdth/d interstate pipeline serving the greater Philadelphia area.
Financial Position and Credit Metrics
NJR maintains strong credit metrics and a solid balance sheet, with credit ratings of A1 (Stable) from Moody’s and A+ (Stable) from Fitch. The company’s Adjusted Funds from Operations (FFO) to Adjusted Debt ratio has improved from 17.4% in FY2021 to 20.6% in FY2024, with expectations of 19-21% for FY2025.
The following chart illustrates NJR’s credit metrics and financial strength:
This financial stability supports NJR’s ability to execute its capital plan and maintain its dividend growth policy. The company has consistently increased its dividend, from $1.02 per share in FY2017 to the current $1.80 per share in FY2025, demonstrating its commitment to shareholder returns.
Forward-Looking Statements
NJR has positioned itself for continued growth, targeting an industry-leading long-term NFEPS growth rate of 7-9% with potential upside. Combined with its dividend yield of approximately 4%, the company expects total shareholder returns of 11-13%.
The following slide outlines the key drivers of NJR’s growth strategy across its business segments:
For NJNG, growth drivers include stronger than expected BGSS incentives margin from optimization of the supply portfolio, improved utility gross margin following a successful rate case, and continued customer growth. CEV’s growth is supported by contracted REC revenue, high operational availability, and its extensive project pipeline, with potential upside from power demand growth.
The company’s dividend policy remains a key component of shareholder returns, with a strong track record of consistent increases:
Conclusion
New Jersey Resources’ Q2 2025 presentation demonstrates the company’s continued financial strength and strategic focus on balanced growth across its diversified business portfolio. By raising its NFEPS guidance for fiscal 2025 to $3.15-$3.30, NJR maintains its track record of exceeding expectations while investing in both its core utility business and clean energy initiatives.
The company’s $1.3-$1.6 billion capital plan over the next two years positions it to achieve its long-term growth targets of 7-9% NFEPS growth and 11-13% total shareholder returns. With strong credit metrics, a growing dividend, and a balanced business mix, NJR appears well-positioned to navigate the evolving energy landscape while delivering value to shareholders.
Full presentation:
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