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J.B. Hunt (JBHT) Benefits From Multiple Tailwinds: Buy Now
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J.B. Hunt Transport Services, Inc. (JBHT - Free Report) rides high on several tailwinds to emerge as an attractive stock for yield-seeking investors at the moment.
Let’s delve into factors responsible for such an outlook.
J.B. Hunt 's growth-by-acquisition strategy raises optimism. To this end, the company purchased Special Logistics Dedicated and its affiliated entities for $136 million in 2017. The buyout has enhanced the company's e-commerce delivery capabilities and is expected to be accretive to its portfolio in the current year.
J.B. Hunt 's third-quarter 2018 results (scheduled for Oct 16) are likely to be aided by higher freight rates, arising from strong shipping demand. Needless to mention the low tax rate is also expected to benefit results. Notably, the Zacks Consensus Estimate for current-quarter earnings has been revised 2.9% upward over the past 90 days.
Apart from third-quarter results, the company’s full-year projections look upbeat. The top line is predicted to increase between 11% and 15% in the current year on the back of impressive performances at the company’s key divisions. Also, the bottom line is anticipated to get a boost from a drop in effective tax rate to 26% from 37.9% in 2017. The Zacks Consensus Estimate for current-year earnings has moved 2.5% up in 90 days.
J.B. Hunt’s efforts to reward shareholders through dividend payments and share buybacks underscore its sound financial position. In January, the company hiked its quarterly dividend to 24 cents per share, representing a 4.3% increase over the previous payout. Even though it did not buy back any shares during the first quarter, it repurchased 420,000 shares for approximately $50 million in the second. As of Jun 30, 2018, the company had around $471 million remaining under its share buyback program.
Owing to the tailwinds, shares of the company have gained 2.2% in the past six months, outperforming the industry’s 1.9% increase.
Further, the company, which carries a Zacks Rank #2 (Buy), flaunts an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores. Our research shows that stocks with VGM Scores of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 make solid investment choice.
In light of the above positives, we believe, investors should add this stock to their portfolio now.
Shares of SkyWest, Trinity and Old Dominion have rallied more than 42%, 20% and 56%, respectively, in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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J.B. Hunt (JBHT) Benefits From Multiple Tailwinds: Buy Now
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) rides high on several tailwinds to emerge as an attractive stock for yield-seeking investors at the moment.
Let’s delve into factors responsible for such an outlook.
J.B. Hunt 's growth-by-acquisition strategy raises optimism. To this end, the company purchased Special Logistics Dedicated and its affiliated entities for $136 million in 2017. The buyout has enhanced the company's e-commerce delivery capabilities and is expected to be accretive to its portfolio in the current year.
J.B. Hunt 's third-quarter 2018 results (scheduled for Oct 16) are likely to be aided by higher freight rates, arising from strong shipping demand. Needless to mention the low tax rate is also expected to benefit results. Notably, the Zacks Consensus Estimate for current-quarter earnings has been revised 2.9% upward over the past 90 days.
Apart from third-quarter results, the company’s full-year projections look upbeat. The top line is predicted to increase between 11% and 15% in the current year on the back of impressive performances at the company’s key divisions. Also, the bottom line is anticipated to get a boost from a drop in effective tax rate to 26% from 37.9% in 2017. The Zacks Consensus Estimate for current-year earnings has moved 2.5% up in 90 days.
J.B. Hunt’s efforts to reward shareholders through dividend payments and share buybacks underscore its sound financial position. In January, the company hiked its quarterly dividend to 24 cents per share, representing a 4.3% increase over the previous payout. Even though it did not buy back any shares during the first quarter, it repurchased 420,000 shares for approximately $50 million in the second. As of Jun 30, 2018, the company had around $471 million remaining under its share buyback program.
Owing to the tailwinds, shares of the company have gained 2.2% in the past six months, outperforming the industry’s 1.9% increase.
Further, the company, which carries a Zacks Rank #2 (Buy), flaunts an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores. Our research shows that stocks with VGM Scores of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 make solid investment choice.
In light of the above positives, we believe, investors should add this stock to their portfolio now.
Other Key Picks
A few other top-ranked stocks in the broader Transportation sector are SkyWest, Inc. (SKYW - Free Report) , Trinity Industries, Inc. (TRN - Free Report) and Old Dominion Freight Line, Inc. (ODFL - Free Report) . While Old Dominion carries a Zacks Rank of 2, SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of SkyWest, Trinity and Old Dominion have rallied more than 42%, 20% and 56%, respectively, in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>