J.B. Hunt Transport Services, Inc. JBHT boasts an impressive dividend payment record. In January 2016, J.B. Hunt had raised quarterly dividend to 23 cents per share, representing a 4.5% increase over the previous payout. During second-quarter 2017, the company repurchased approximately 564,000 shares worth $50 million.
J.B. Hunt’s expansion efforts also raise optimism. The company has recently acquired Special Logistics Dedicated and its affiliated entities for $136 million. The move will enhance the company’s e-commerce delivery capabilities and will be accretive in 2018.
The company’s intermodal segment performance also holds promise. On an encouraging note, the segment accounted for 57.9% of the top line in the second quarter of 2017. J.B. Hunt expects intermodal growth in 2017 owing to increase in transloads and addition of customers among other positives.
J.B. Hunt’s trailing 12-month return on equity (ROE) supports growth potential. The company’s ROE of 30% compares favorably with the industry’s 17.7% ROE.
The company also has a sound balance sheet. At the end of second-quarter 2017, cash and cash equivalents were $7.3 million compared with approximately $6.4 million at the end of 2016. Long-term debt was $943.2 million compared with $986.3 million at the end of 2016.
Shares of the company have performed well of late on the back of tailwinds. The stock has rallied 15.2% compared with the industry’s14% gain in the last three months.
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In the light of the above merits, we believe investors must retain the J.B. Hunt stock for now.
Zacks Rank & Key Picks
J.B. Hunt currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Transportation sector are YRC Worldwide, Inc. YRCW, Saia, Inc. SAIA and Werner Enterprises, Inc. WERN. While YRC Worldwide sports a Zacks Rank #1 (Strong Buy), Saia and Werner Enterprises carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of YRC Worldwide, Saia and Werner Enterprises have surged more than 18%, 89% and 43%, respectively, in a year.
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