Shares of Jacobs Engineering Group Inc. (JEC) reached a new 52-week high of $65.30 during trading session on Jan 13. This marks an increase from the previous high of $64.27 that the stock hit on Nov 18, 2013.
The closing price of Jacobs on Jan 13 was $64.34, representing a solid one-year return of 43.1%. The trading volume for the session was 1.4 million shares. The construction and engineering company, with a Zacks Rank #3 (Hold), has potential for further accretion. This is reflected in both its expected earnings growth rate (13.5% over the next five years) and earnings estimate revision for 2014.
Growth Drivers
We are optimistic of a bright future for Jacobs, based on its strong contracts pipeline which raises expectation of higher revenues. The company’s unmatched contract wins helpsit grow organically. Based on joint ventures and contract wins, Jacobs caters to an array of sectors like oil and gas, petrochemical, mining, IT services and power. Moreover, National Government end market seems promising, with the company receiving eight awards in the fourth quarter of fiscal 2013.
Jacobs is also well positioned to grow inorganically. The company has undertaken many acquisitions in the recent past, of which Guimar Engenharia, Ilitha, Sinclair Knight Merz were announced in fiscal fourth-quarter 2013. Management is consistently pursuing lucrative acquisitions which will aid growth further.
Jacobs is expected to release its fiscal first-quarter 2014 results on Jan 22. The Zacks Consensus Estimate for the same stands at 73 cents.
Other Stocks to Consider
Jacobs currently has a market capitalization of $8.5 billion. Some better-ranked stocks to watch out for in the industry include Standard Pacific Corp. (SPF), Fluor Corporation (FLR) and Toll Brothers Inc. (TOL). All these stocks carry a Zacks Rank #2 (Buy).
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