South Jersey Industries (SJI, Financial) (SJI - $19.27 – NYSE) is a utility holding company that operates a gas Utility in Southern New Jersey as well as providing Wholesale Energy Marketing and Fuel Management services. e stock has been under pressure the past couple of quarters along with the overall Utility sector. ere are fears that COVID-19 will negatively impact demand along with changing investor sentiment. However, the company reported solid results over the past couple of quarters along and rea rmed its full-year earnings expectations. We attribute some of the weakness to its partial ownership of the proposed PennEast pipeline. is is a partially constructed pipeline where the viability of its completion is in doubt as a result of the litigation-related cancellation of another pipeline project. Until it is resolved, this issue could remain an overhang. In addition, we would have expected the Utility sector to perform better in this low-rate environment given the regulated nature of the business and very attractive dividend yields. We continue to like South Jersey's attractive valuation (13x 2020 estimate of $1.53) and dividend yield of 5.9%.
From Keeley Asset Management Corp (Trades, Portfolio)'s Small Cap Dividend Value Fund third-quarter 2020 commentary.
