Breaking Down New Jersey Resources Corporation (NJR) Financial Health: Key Insights for Investors

You're looking at New Jersey Resources Corporation (NJR) right now, trying to figure out if the utility's recent regulatory wins translate to real, sustained shareholder value, and honestly, the 2025 numbers look defintely strong. The core of the story is the New Jersey Natural Gas (NJNG) segment, which drove a significant performance boost after the New Jersey Board of Public Utilities (BPU) approved a $157.0 million annual base rate increase effective last November. That regulatory clarity, plus the successful sale of the residential solar portfolio, allowed management to raise the lower end of their fiscal 2025 Net Financial Earnings Per Share (NFEPS) guidance to a range of $3.20 to $3.30 per share. We've already seen year-to-date NFEPS hit $3.13 per share through the third quarter, a nearly 55% jump year-over-year. That's impressive. Still, the company is committing to substantial capital expenditures, with a full-year plan ranging from $610 million to $790 million, largely focused on infrastructure and the new $385.6 million SAVEGREEN® energy efficiency program. So, the near-term opportunity is clear-a regulated utility with strong earnings momentum-but you need to understand how that massive capital deployment impacts future returns and the balance sheet.

Revenue Analysis

You need to know where New Jersey Resources Corporation (NJR) is actually making its money, especially with the shifts in the energy market. The direct takeaway is that NJR's core regulated utility business, New Jersey Natural Gas, remains the dominant, stable engine, but non-regulated segments are driving significant, albeit one-time, growth in fiscal year 2025.

For the trailing twelve months ending June 30, 2025, the company's total revenue stood at approximately $2.10 Billion. That figure represents a strong year-over-year revenue growth rate of about +21.02%, which is defintely a solid jump compared to the prior fiscal year's revenue of $1.80 Billion. That's a powerful number, but you have to look under the hood to see what's fueling it.

Primary Revenue Sources and Segment Contribution

NJR operates a diversified model across five main segments. The bulk of the company's stability and predictable cash flow comes from its regulated utility, New Jersey Natural Gas (NJNG), which distributes natural gas to nearly 588,000 customers in New Jersey.

The best way to map the true value contribution is through the expected Net Financial Earnings (NFE) breakdown for fiscal year 2025, which is what management uses to guide investors. Here's the quick math on where the earnings are coming from:

• New Jersey Natural Gas (NJNG): Expected to contribute 64% to 67% of NFE, providing the foundational stability.
• Clean Energy Ventures (CEV): Projected at 20% to 22%, driven by commercial solar projects.
• Energy Services (ES): Expected to deliver 10% to 12%, primarily from wholesale gas marketing and asset optimization.
• Storage and Transportation (S&T): Contributing 4% to 6% from midstream assets like the Leaf River and Adelphia Gateway.

Analysis of Significant Revenue Changes

The impressive revenue growth and the higher-than-usual contribution from the non-regulated segments in FY2025 are largely due to two critical, near-term events. First, the New Jersey Natural Gas segment benefited from the implementation of new base rates, which took effect in November 2024, immediately boosting utility gross margin.

Second, the Clean Energy Ventures segment saw a significant one-time gain from the sale of its residential solar portfolio for $132.5 million in the first quarter of fiscal 2025. This strategic divestiture, while a one-off revenue event, is what pushed CEV's NFE contribution to the higher end of its range and is a key reason for the overall +21.02% TTM revenue growth. You need to strip out that one-time gain when modeling future growth, or you'll overestimate the run-rate. The core business is strong, but the headline growth is inflated by a strategic asset sale.

For a deeper dive into the company's valuation, you can read the full analysis at Breaking Down New Jersey Resources Corporation (NJR) Financial Health: Key Insights for Investors.

Profitability Metrics

You want to know if New Jersey Resources Corporation (NJR) is turning its strong revenue into solid, bottom-line profit. The direct takeaway for fiscal year 2025 (FY2025) is that the company is demonstrating significant net income growth, largely driven by regulatory rate increases and a strategic asset sale, placing its profitability well above the typical utility peer set.

As of the third quarter (Q3) of FY2025, New Jersey Resources Corporation's consolidated net income, the GAAP (Generally Accepted Accounting Principles) measure of total profit, stood at $320.6 million, a sharp increase from the $198.6 million reported for the same nine-month period in FY2024. This jump is defintely a key signal of financial health, but you need to look closer than just the headline number.

Gross, Operating, and Net Profit Margins

In the utility sector, profitability is often best viewed through regulated margins and non-GAAP (Non-Generally Accepted Accounting Principles) figures like Net Financial Earnings (NFE), which strips out the noise of unrealized gains/losses on derivatives. The core Natural Gas Distribution business, New Jersey Natural Gas (NJNG), drives stability, and its gross margin is strong.

• Gross Margin (Natural Gas Distribution, Q1 FY2025): The segment's gross profit of $123.191 million on operating revenues of $333.765 million translates to a gross margin of nearly 36.91%. [cite: 2 in step 1]
• Net Profit Trend: The company's full-year Net Financial Earnings Per Share (NFEPS) guidance for FY2025 was raised to a range of $3.20 to $3.30 per share, reflecting strong operational performance and a one-time gain from the sale of its residential solar portfolio. This guidance is a clear indicator of management's confidence in translating revenue into shareholder value.

Here's the quick math on why that NFEPS guidance is so important: it represents a significant step up from the long-term growth target of 7% to 9%, largely due to non-core, but highly profitable, strategic moves. What this estimate hides is the inherent volatility in the Energy Services segment, which can swing quarterly results, but the regulated utility base provides a solid foundation.

Operational Efficiency and Industry Comparison

The real story in operational efficiency is the impact of regulatory outcomes. New Jersey Resources Corporation's utility gross margin-a key operational metric for a regulated entity-has increased, primarily due to the $157.0 million annual base rate increase approved by the New Jersey Board of Public Utilities (BPU) in late 2024. [cite: 3 in step 1] This is a direct, structural improvement to profitability.

When we compare New Jersey Resources Corporation's performance to the overall industry, the picture is favorable, especially in capital efficiency. Your money is working harder here.

The higher Return on Equity (ROE) of 14% compared to the industry average of 8.5% suggests superior capital allocation and a strong regulatory environment that allows for better returns on rate base. [cite: 5 in step 1] This is the number that tells you management is disciplined about where they invest capital, like the $72.9 million invested year-to-date in the SAVEGREEN® energy-efficiency program. For a deeper dive into the company's financial structure, see Breaking Down New Jersey Resources Corporation (NJR) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You're looking at New Jersey Resources Corporation (NJR) and wondering how they fund their growth-it's a fair question, especially in the capital-intensive utility sector. The direct takeaway is that NJR operates with a higher degree of financial leverage (Debt-to-Equity) than the utility sector average, but they are actively managing this with a focus on maintaining their investment-grade credit rating.

As of the quarter ending June 2025, New Jersey Resources Corporation (NJR) carried a substantial debt load. Their long-term debt and capital lease obligations stood at approximately $3.189 billion, plus another $369 million in short-term debt and capital lease obligations. This means their total debt is around $3.56 billion. That's a lot of money to service, so you need to see how it stacks up against their equity.

Here's the quick math on their capital structure (the mix of debt and equity used to finance assets). NJR's Debt-to-Equity (D/E) ratio was about 1.47, or 147%, based on recent 2025 data. To be fair, this ratio has increased from 117.8% over the past five years, indicating a growing reliance on debt to finance their operations and expansion.

This is a key point for investors:

• NJR's D/E ratio (147%) is higher than the Utilities sector average of around 95.4%.
• A higher D/E ratio means a company is using more debt than shareholder equity to fund its assets.
• It increases risk, but it can also magnify returns if the borrowed capital is invested wisely.

The company is defintely leaning into debt financing, but the bigger question is whether they can handle it. They are committed to maintaining their investment-grade credit ratings, which is crucial for a utility's access to cheap capital. Their projected adjusted funds from operations (AFFO) to adjusted debt ratio for fiscal year 2025 is expected to be between 18% and 20%, which is a key metric for rating agencies. They are balancing high leverage with strong cash flow generation to keep the rating intact.

The financing strategy is clear: use debt to fund capital investments-projected to be between $1.3 billion and $1.6 billion over fiscal years 2025 and 2026-to drive earnings growth. They are using debt to accelerate growth in their utility and clean energy segments, a common strategy for regulated utilities that can pass financing costs onto customers. Still, the high debt level means any unexpected regulatory or operational hiccups could put pressure on their financial flexibility. You can read more about the company's overall financial picture in Breaking Down New Jersey Resources Corporation (NJR) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You're looking at New Jersey Resources Corporation (NJR) and wondering if they have the cash to cover their near-term bills. That's the core of liquidity analysis, and for a utility like NJR, the picture is often different than for a tech company. The short answer is: their current liquidity metrics are tight, but their stable cash flow from operations provides a necessary cushion.

For fiscal year 2025, the standard liquidity ratios tell a clear, if slightly concerning, story. NJR's Current Ratio sits at about 0.76, meaning they have only 76 cents in current assets to cover every dollar of current liabilities. The Quick Ratio (which strips out inventory, a less liquid asset) is even lower at roughly 0.48.

Here's the quick math for Q3 2025, using figures in millions of USD:

• Current Assets: $622.332
• Current Liabilities: $887.774
• Working Capital: -$265.442 million

A negative working capital of $265.442 million as of June 30, 2025, is defintely a red flag in a vacuum. However, for a regulated utility with predictable revenue streams, this is common. They rely on consistent cash generation, not a large stockpile of cash or inventory, to meet obligations like their short-term debt, which was $480.806 million in Q3 2025.

Cash Flow: The Real Liquidity Engine

The true measure of NJR's health lies in their Cash Flow Statement. For the first nine months of fiscal 2025, their cash flow from operations (OCF) was strong at $385.2 million, an increase from the same period in 2024. This is the lifeblood of a utility, proving its ability to generate cash from its core business-selling gas and energy.

The challenge, and the reason for the tight liquidity ratios, is their aggressive investment strategy. NJR is a growth-oriented utility, and that requires cash. This is evident in the Investing Cash Flow (ICF) trends:

• Capital Expenditures (CapEx) for the first nine months of FY2025 totaled $456.8 million.
• This CapEx is primarily for infrastructure projects at New Jersey Natural Gas (NJNG) and expansion in Clean Energy Ventures (CEV).
• A significant one-time inflow of $132.5 million from the sale of a residential solar portfolio in Q1 2025 helped offset some of this spending.

The net result of these activities is often a cash outflow from investing, which then requires funding from financing activities. In Q2 2025 alone, the net change in cash and equivalents was an outflow of about $82.1 million, showing the pressure of funding these investments.

Financing and Liquidity Concerns

Financing Cash Flow (FCF) is where NJR manages its capital structure to bridge the gap between OCF and ICF. They are actively managing debt and equity. The company maintains a stable dividend policy, with the quarterly dividend recently increased to $0.475 per share, which appeals to income-oriented investors. This payout is supported by the consistent operating cash flow.

What this estimate hides is the utility's access to external credit and capital markets, which is generally excellent due to its regulated business model. The key action for you is to monitor the debt-to-equity ratio, which is high for a utility at 1.25. While OCF is strong, a sustained period of high CapEx combined with rising interest rates could make that debt more expensive to service, putting pressure on future earnings. For a deeper dive into who is buying their shares, check out Exploring New Jersey Resources Corporation (NJR) Investor Profile: Who's Buying and Why?

Finance: Track the quarterly OCF versus CapEx to ensure the operating business can cover at least 80% of its capital spending by the end of the fiscal year.

Valuation Analysis

You're looking at New Jersey Resources Corporation (NJR) and wondering if the market has it right. Based on fiscal year 2025 data, the stock appears reasonably valued, leaning slightly toward undervalued compared to its historical averages and the broader utilities sector. The key takeaway is that NJR's valuation multiples suggest it is a stable, income-focused utility, but not a growth stock.

The stock's current price of $46.38 as of November 2025 sits near the lower end of its 52-week range of $43.46 to $51.95. Over the last 12 months, the price has fallen by 4.84%, which is a clear underperformance that creates a potential near-term opportunity for income-focused buyers. Here's the quick math on the core ratios.

Is New Jersey Resources Corporation (NJR) Overvalued or Undervalued?

When we look at the core valuation metrics, New Jersey Resources Corporation (NJR) shows a compelling case for being undervalued, especially when compared to its historical trading patterns and the wider utilities sector. The market is pricing in stability, but not much growth, which is typical for a utility, but the current ratios are attractive.

• Price-to-Earnings (P/E): The trailing P/E ratio is approximately 11.35. This is significantly lower than the P/E for the S&P 500 and even below the typical utility sector average, suggesting the stock is inexpensive relative to its trailing earnings.
• Price-to-Book (P/B): The P/B ratio is 2.10. This is a solid metric for a regulated utility, indicating the stock trades at just over twice its net asset value. For a company with a significant infrastructure base, this multiple is healthy.
• Enterprise Value-to-EBITDA (EV/EBITDA): The trailing 12-month (TTM) EV/EBITDA stands at approximately 11.06. This is a much more reasonable figure than the high outliers you might see in a growth sector, and it reflects the company's enterprise value of approximately $8.23 billion relative to its TTM EBITDA of $744.03 million.

What this estimate hides is the one-time gain from the residential solar portfolio sale, which boosted the company's Net Financial Earnings Per Share (NFEPS) guidance for fiscal 2025 to a range of $3.15 to $3.30 per share. Still, even with that factored in, the valuation remains conservative.

Dividend Strength and Analyst Consensus

The dividend profile is a major anchor for New Jersey Resources Corporation's valuation and a strong point for investors seeking income. The dividend yield is a healthy 4.08%, with an annualized dividend of $1.90 per share. The payout ratio is a comfortable 45.11%, which is defintely sustainable and leaves ample room for capital investment or future dividend increases.

Analyst consensus is currently a Hold, which is common for a steady utility stock. The average 12-month consensus price target is set at $51.50, representing an upside of over 10% from the current price. This suggests that while analysts don't see a massive breakout, they do see a clear path for capital appreciation back toward the 52-week high, plus you get the strong dividend yield while you wait. For a deeper dive into the company's full financial picture, you can read our full post: Breaking Down New Jersey Resources Corporation (NJR) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at New Jersey Resources Corporation (NJR) and seeing a steady utility with a clean energy upside, which is a fair assessment. But as a seasoned analyst, you know that stability in a regulated business model (like New Jersey Natural Gas, or NJNG) still carries significant, non-negotiable risks. The biggest concerns for investors right now fall into three buckets: regulatory, market-driven, and operational.

The company's strong fiscal 2025 performance-with year-to-date Net Financial Earnings (NFE) reaching $313.4 million through June 30, 2025-was largely driven by the $157.0 million annual base rate increase at NJNG and the $132.5 million gain from the residential solar sale. Still, those gains don't eliminate the underlying risks, they just buy time.

External and Regulatory Pressures

The primary external risk is the regulatory environment. While NJNG's utility gross margin is relatively protected, the timing and outcome of rate cases are always uncertain. For example, the rate case for the Adelphia Gateway Pipeline, which is part of the Storage and Transportation segment, is currently before the Federal Energy Regulatory Commission (FERC). An adverse decision there could impact future earnings, even as the utility segment is expected to contribute approximately 65% of full-year fiscal 2025 Net Financial Earnings Per Share (NFEPS).

The Clean Energy Ventures (CEV) segment, which is projected to contribute over 20% of fiscal 2025 NFEPS, faces its own regulatory risk. Its returns rely heavily on federal tax credits and state-level incentives, particularly the market value of Solar Renewable Energy Certificates (SRECs). If the value of SRECs drops or tax laws change, the return on their solar assets could be negatively impacted. That's a direct hit to the growth engine.

• Regulatory Lag: Delays in recovering capital expenditures from customers.
• SREC Volatility: A sustained drop in solar credit market prices.
• Uncertainty in FERC Rate Cases: Adverse outcomes for midstream assets.

Operational and Financial Risks

Operationally, the core business faces substantial infrastructure and environmental liabilities. New Jersey Natural Gas is responsible for the ongoing cleanup of former Manufactured Gas Plant (MGP) sites, which are complex, long-term legal and environmental risks. Plus, as a physical utility, they are exposed to catastrophic events-natural disasters, like major coastal storms, or even a widespread cyberattack on critical infrastructure.

On the financial side, the Energy Services segment deals with commodity price volatility. The company uses a non-GAAP measure, Net Financial Earnings (NFE), to strip out unrealized gains and losses on derivative instruments, which helps smooth out the noise for investors, but the underlying volatility is defintely still there. Honestly, that's just the cost of doing business in energy trading.

Mitigation Strategies and Clear Actions

New Jersey Resources Corporation (NJR) is not sitting idle; they have clear mitigation plans. They are aggressively addressing operational and climate-related risks through capital investment. The new SAVEGREEN energy efficiency program, approved by the New Jersey Board of Public Utilities (BPU), is a $385.6 million investment that runs through June 2027, designed to enhance system reliability and meet state decarbonization goals. This is a smart, regulated investment that allows for cost recovery.

Also, the sale of the residential solar portfolio for $132.5 million was a strategic move to de-risk the Clean Energy Ventures segment, shifting focus to larger, more predictable commercial solar projects. They placed 32.1 megawatts (MW) of commercial solar into service in the first nine months of fiscal 2025. This dual strategy-stable utility growth plus de-risked clean energy expansion-is the core of their long-term plan, which targets a 7% to 9% NFEPS growth rate. You can read more about the company's financial structure in Breaking Down New Jersey Resources Corporation (NJR) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for a clear map of where New Jersey Resources Corporation (NJR) is going, and the short answer is that their regulated utility and clean energy segments are driving a strong near-term outlook. The company raised its fiscal 2025 Net Financial Earnings Per Share (NFEPS), a non-GAAP financial measure, guidance to a range of $3.20 to $3.30 per share, which is defintely ahead of their long-term growth target of 7% to 9%. This isn't just a lucky quarter; it's the result of deliberate strategic moves.

The core of NJR's growth is a dual-engine strategy: expanding the stable, regulated utility business while aggressively growing the clean energy portfolio. This diversified approach is a key competitive advantage, providing a buffer against volatility in any single segment. The company is making significant capital commitments, planning to invest between $1.3 billion and $1.6 billion over fiscal years 2025 and 2026, targeting these two main areas.

Key Growth Drivers and Strategic Initiatives

The biggest near-term driver is the New Jersey Natural Gas (NJNG) segment, which is expected to remain the largest contributor to earnings.

• Rate Base Expansion: NJNG received approval for a $157.0 million annual base rate increase, effective November 21, 2024. This regulatory win provides immediate, stable revenue growth.
• Energy Efficiency Investment: The new, expanded SAVEGREEN program is a major initiative, backed by a $385.6 million investment from January 2025 through mid-2027. This year alone, fiscal 2025 capital expenditures for SAVEGREEN are projected to be $90-95 million, a growth of over 30%. This program drives customer satisfaction and infrastructure modernization.
• Clean Energy Build-out: The Clean Energy Ventures (CEV) segment is pushing growth by placing approximately 63 MW of new solar capacity into service in fiscal 2025. This expansion is supported by the strategic sale of its residential solar portfolio for $132.5 million in November 2024, monetizing lower-margin assets to fund higher-return commercial projects.

Here's the quick math on segment contribution: New Jersey Natural Gas is projected to account for 64% to 67% of fiscal 2025 NFEPS, while Clean Energy Ventures is expected to contribute 20% to 22%. This shows a healthy balance, leaning on the regulated utility for stability while accelerating the clean energy transition.

Competitive Advantages and Future Positioning

New Jersey Resources Corporation (NJR) is positioned well because of its regulated utility's footprint in a growing region, plus its established presence in the clean energy space. They are the largest solar owner-operator in New Jersey, giving them a significant head start in the state's decarbonization push. The company's 30 consecutive years of dividend growth is a testament to its prudent financial management and stable earnings profile.

Still, you need to watch the regulatory landscape. To be fair, future regulatory decisions could limit rate recovery on major projects, so the recent leadership refresh-including the creation of a dedicated NJR Strategy function led by a new Vice President-is a smart move to align growth plans with the fast-changing energy policy environment. This new function is a clear action to mitigate regulatory risk and sustain favorable outcomes for new investments.

For a deeper dive into who is backing these growth plans, you should read Exploring New Jersey Resources Corporation (NJR) Investor Profile: Who's Buying and Why?