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Purchased Some South Jersey Industries Baby Bonds

Yesterday I made a purchase of a 1/2 position in the South Jersey Industries 5.625% Junior Subordinated notes (SJIJ).

While the issue is a notch under investment grade it appears that the risk/reward was about right for the price I paid–$24.80–a current yield of around 5.70%. These shares had traded solidly in the $26.50 area prior to the pandemic.

As I have mentioned I am pretty loaded up with utility issues–mainly electric utility baby bonds and with closed end funds (CEF) preferreds–most bought at bargain prices last month so have been mostly lying in the weeds in the last couple of weeks around 70% and watching for reasonable buys.

I am quite convinced we will see lower prices in many preferreds and baby bonds–but when? In the meantime I really want to get back on the dividend train so will get some decent quality issues here and there to get the dividends and interest rolling.

South Jersey Industries is the natural gas supplier for a portion of New Jersey and recently reported solid earnings for Q1 ending 3/31/2020. More importantly they affirmed their forecast for the balance of the year–very solid numbers (of course who can totally forecast in this environment).

The shares go ex dividend on 5/29/2020.

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