Shares of J.B. Hunt Transport Services JBHT have been performing well lately, gaining 21.4% over the past six months. As a result, the stock has outperformed the S&P 500’s 10.1% rise in the same time frame.
Image Source: Zacks Investment Research
Let’s look into the factors that are aiding this currently Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upward Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 5.2% upward over the past 90 days. For 2022, the consensus mark for earnings has moved 5.4% north in the same time frame. The favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at their disposal, it is in the best interest of investors to be guided by the brokers' advice and the direction of their estimate revisions. This is because the same serves as an important indicator in ascertaining the stock price.
Solid Revenue Boost Amid Pandemic: The Zacks Consensus Estimate for current-quarter revenues is pegged at $3.29 billion, suggesting 20.2% growth from the year-ago quarter’s reported figure. Similarly, the consensus mark for current-year revenues stands at $11.98 billion, hinting at a 24.29% increase from the prior-year reported figure.
J.B. Hunt’s Momentum Score of B further highlights its short-term attractiveness.
Solid Industry Rank: The industry to which J.B. Hunt belongs, currently has a Zacks Industry Rank of 21 (of 250 plus groups). Such a solid rank places JBHT in the top 8% 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’s efforts to reward its shareholders are encouraging. JBHT increased quarterly dividend twice this year. In January 2021, JBHT raised its quarterly dividend to 28 cents per share, up 3.7% from the previous payout. The same was further hiked to 30 cents per share in April. JBHT is also active on the buyback front, having resumed the same in the fourth quarter of 2020 after a temporary pause due to coronavirus concerns.
During the first nine months of 2021, J.B. Hunt repurchased shares worth $135 million. JBHT had approximately $366 million remaining under its share repurchase authorization at the end of the third quarter of 2021.
Moreover, J.B. Hunt is benefiting from strong performances across all its segments. While the Dedicated Contract Services unit is being aided by a better fleet productivity and higher average revenue producing trucks, the Integrated Capacity Solutions unit is gaining from a favorable customer freight mix as well as higher contractual and spot rates.
Other Stocks Worth a Look
Investors interested in the Zacks Transportation sector may also consider C.H. Robinson CHRW and Landstar System (NASDAQ:LSTR) LSTR.
The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW benefits from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with higher revenues across all the segments.
CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has moved up 7% in the past year. C.H. Robinson currently sports a Zacks Rank #1.
The long-term expected earnings per share (three to five years) growth rate for Landstar is pegged at 12%. LSTR is benefiting from the gradual economic mend and improved freight market conditions in the United States.
LSTR’s earnings and revenues rose significantly since the third quarter of 2020 owing to robust revenues in its primary segment truck transportation. LSTR has surged 25.3% in the past year. Landstar sports a Zacks Rank of 1, presently.
Zacks’ Top Picks to Cash in on Artificial Intelligence
This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.
See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report
Landstar System, Inc. (LSTR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research