Reasons to Add SJW Group Stock to Your Portfolio Right Now

SJW Group’s SJW strategic investments to strengthen its existing infrastructure and expand operations are expected to drive its performance further. The company is also benefiting from its strategic water and wastewater system acquisitions. Given its growth opportunities, SJW Group makes for a solid investment option in the utility sector.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment option at the moment.

SJW’s Growth Projections & Surprise History

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has moved up 0.7% in the past seven days to $2.96.

The Zacks Consensus Estimate for 2025 revenues is pinned at $768.42 million, implying a year-over-year increase of 2.7%.

SJW’s long-term (three to five years) earnings growth rate is 4.12%. The company delivered an average earnings surprise of 13.3% for the trailing four quarters.

Debt Position of SJW

SJW Group’s total debt to capital is 57.24%, better than the sector’s average of 60.39%.

The time-to-interest earned ratio at the end of the fourth quarter of 2024 was 2.4. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.

SJW’s Dividend History

SJW has been consistently paying dividends and increasing its shareholders’ value. The CAGR for its dividend has exceeded 5.9% over the past five years. The company has paid dividends for more than 80 consecutive years, with increases in the past 57 years. Currently, its quarterly dividend is 42 cents per share, resulting in an annualized dividend of $1.68. Its current dividend yield is 3.09%, better than the Zacks S&P 500 composite’s 1.37%.  

SJW’s Systematic Investments

SJW Group remains focused on investing in its operations and remaining actively engaged in its local communities. It invested nearly $353 million in water and wastewater infrastructure in 2024 and expects to invest $473 million in 2025, up 34% from the actual spend in 2024. The company has updated its five-year plan to invest $2 billion in water and wastewater infrastructure, indicating a 25% increase over the previous plan.

SJW’s Stock Price Performance

In the past three months, the stock has returned 13.2% compared with the sector’s 0.7% growth.

Other Stocks to Consider

A few other top-ranked stocks from the same sector are Middlesex Water Company MSEX, sporting a Zacks Rank #1 (Strong Buy) at present, and American Water Works AWK and Exelon Corporation EXC, both holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

MSEX’s long-term earnings growth rate is 6.1%. The Zacks Consensus Estimate for MSEX’s 2025 EPS is pegged at $2.53, implying a year-over-year improvement of 2.4%.

AWK’s long-term earnings growth rate is 7.4%. The Zacks Consensus Estimate for 2025 EPS is pegged at $5.72, indicating a year-over-year improvement of 6.1%.

EXC’s long-term earnings growth rate is 5.99%. The company delivered an average earnings surprise of 7.6% for the trailing four quarters.

 

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This article originally published on Zacks Investment Research (zacks.com).

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