New Jersey Resources Highlighted for 9.6% ROE, 50%+ Payout as P/E Drops to 15
FPA’s fund, which returned –0.36% in Q4 2025 vs the Russell 2000 Value’s 3.26%, highlights New Jersey Resources for its regulated utility model, 9.6% allowed ROE and 50%+ dividend payout. NJR has gained 11.7% in the past month and 17.7% over 12 months at a forward P/E of 15.
1. FPA Fund Performance and Strategy
The FPA Queens Road Small Cap Value Fund returned –0.36% in Q4 2025 versus the Russell 2000 Value’s 3.26%, underperforming as markets favored speculative names in the second half of the year. The fund maintains a quality-and-value focus designed to limit drawdowns, holding stocks like NJR for stable earnings and reasonable valuations.
2. NJR’s Business Model and Financial Metrics
New Jersey Resources operates as a regulated gas utility serving key New Jersey counties with a 9.6% allowed ROE and efficient cost-recovery mechanisms. The company has diversified into clean energy, storage, pipelines and trading, delivering mid-double-digit ROE, high single-digit EPS growth and a dividend payout ratio above 50%.
3. Stock Performance and Valuation
NJR shares have risen 11.7% over the past month and 17.7% in twelve months, reflecting growing investor interest. Its market capitalization stands at $5.42 billion and its forward P/E multiple has contracted from 20x to 15x, positioning the stock as an overlooked opportunity in the utility sector.