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Reasons Why Investors Should Bet on J.B. Hunt (JBHT) Now

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·4 min read
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J.B. Hunt Transport Services JBHT is currently benefiting from strong performances of its key segments, namely Dedicated Contract Services (DCS), Truckload and Final Mile Services (FMS). Efforts to reward its shareholders also bode well.

Against this backdrop, let’s look at the factors that make this stock an attractive pick.

Solid Rank & Momentum Score: J.B. Hunt currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. JBHT’s Momentum Score of A further highlights its short-term attractiveness.

Northward Estimate Revisions: The Zacks Consensus Estimate for current-year earnings has been revised 1.17% upward over the past 60 days. For 2023, the consensus mark for earnings has moved 1.81% north in the same time frame. Such favorable estimate revisions indicate brokers’ confidence in the stock.

Given the wealth of information at their disposal, investors are best guided by brokers' advice and the direction of their estimate revisions.

Healthy Revenues Despite Pandemic: The Zacks Consensus Estimate for 2022 revenues is currently pegged at $13.88 billion, suggesting 14.04% growth from the 2021 actuals. Similarly, the consensus mark for first-quarter 2022 (results will be out on Apr 18) revenues is presently pegged at $3.25 billion, hinting at an 24.3% increase from the first-quarter 2021 reported figure.

Solid Industry Rank: The industry to which J.B. Hunt belongs, currently has a Zacks Industry Rank of 28 (of 250 plus groups). Such a solid rank places JBHT in the top 11% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.

A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.

Other Bullish Factors: J.B. Hunt is gaining from strength in the DCS and Truckload segments. Rapid expansion of JBHT’s Final Mile network (delivery of goods at customers’ doorsteps) through strategic acquisitions and organic growth is encouraging. With the online shopping space growing by leaps and bounds, it is no surprise that growth in last-mile deliveries (or final mile delivery) is outpacing traditional freight. The deal inked last month to substantially improve intermodal capacity to meet the buoyant demand scenario as far as intermodal services are concerned is very encouraging.

We are also impressed with J.B. Hunt’s efforts to reward its shareholders through dividend payments and share repurchases. In January 2022, JBHT hiked its dividend 33% to 40 cents per share (annually: $1.60). JBHT raised its dividend twice last year. JBHT is also active on the buyback front.

Other Stocks Worth a Look

Investors interested in the same industry may also consider Old Dominion Freight Line ODFL and Forward Air Corporation FWRD, both stocks currently carrying a Zacks Rank of 2.

Old Dominion Freight Line is being aided by improved freight market conditions. Efforts to reward its shareholders also augur well. In February, ODFL’s board cleared a 50% increase in its quarterly dividend payout, taking the total to 30 cents per share.

ODFL’s earnings trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.46%. The Zacks Consensus Estimate for ODFL’s 2022 earnings has moved 2.83% north in the past 60 days.

Higher volumes owing to better freight market environment bolster Forward Air’s top line. Thanks to growth in its operations, FWRD is committed to rewarding its shareholders with dividends and share buybacks. In February, FWRD’s board approved a 14% hike in its quarterly dividend payment, expanding the total to 24 cents per share.

The Zacks Consensus Estimate for Forward Air’s 2022 earnings has been revised 4.14% upward in the past 60 days. FWRD’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.11%.


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J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
 
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
 
Forward Air Corporation (FWRD) : Free Stock Analysis Report
 
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