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New Jersey Resources (NJR)
Old 01-17-2010, 06:03 PM   #1
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New Jersey Resources (NJR)

DH will be inheriting a fairly substantial amount of stock in this company from his recently departed mom. Frankly, we're still reeling from her loss and haven't had a lot of time to think this through. We did some quick research on this company and it seems sound. Since the basis will be stepped up to the date of my MIL's death, we would have a very small gain or loss if we sold it right away.

We don't need the cash so that's not the issue. DH is inclined to hang on to it. Perhaps this is because his mom had this stock since the WW2 days and it's always paid her reliable dividends.

I'm thinking this would not be an investment we would make if we were looking for something to put some funds into. Even so, this is his decision since its from his mom. Id just like to give him some good advice. It wont be a material enough portion of our portfolio to loose sleep over, but is substantial enough to warrant some analysis. Any thoughts you all have are greatly appreciated, as always.
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Old 01-17-2010, 06:18 PM   #2
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I'm thinking this would not be an investment we would make if we were looking for something to put some funds into.
In that case, no matter what the stock is I would sell it and reinvest. As you point out, you will incur virtually no capital gains due to the step up in basis to the date of her death. I am assuming that there is not a very big fee to sell it.
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Old 01-17-2010, 06:45 PM   #3
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Hi <new here -getting ready to post my intro>

In 2010 I believe there are changes to the "step up valuation".

Make sure you double check your assumptions.
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Old 01-17-2010, 06:59 PM   #4
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Hi <new here -getting ready to post my intro>

In 2010 I believe there are changes to the "step up valuation".

Make sure you double check your assumptions.
Good point. It is always best to double check.
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Old 01-17-2010, 07:04 PM   #5
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IMHO such decisions should be made purely on the merits of the investment and its place in your asset allocation.

NJR's current dividend yield is 4.11% ($0.38 per quarter on a share price of $36.96) and the corporation apparently has continuously paid dividends since 1952. It seems like a perfectly reasonable dividend stock to hold, unless you think Natural Gas is going out of business, or there's competition in New Jersey.

As always, no single investment should make up more than, say, 5% of your portfolio.
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Old 01-17-2010, 07:22 PM   #6
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I'm thinking this would not be an investment we would make if we were looking for something to put some funds into.

That statement is a no-fail sell signal.
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Old 01-17-2010, 07:33 PM   #7
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As for the company, I live in their market area and am a customer. They are easily the best run utility I have ever done business with and their market area has a track record of decent, steay growth.

Whether it is a good investment, I have no idea.
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