J.B. Hunt Transport Services, Inc. (JBHT) is one of the largest transportation and logistics companies in North America with customers in the United States, Canada and Mexico.
The company’s primary focus has been on intermodal freight solutions through its partnership with BNSF Railway Company and other rail carriers. Using its own pickup and delivery services (drayage), the company provides cost-competitive and seamless coordination of combined rail and dray movements for its customers.
The company operates five business segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS) and Truckload (JBT). While JBI accounted for 46% of fourth-quarter 2020 revenue, ICS and JBT were the fastest-growing segments with revenue that rose 56% and 50%, respectively.
Economic Recovery Play
J.B. Hunt reported fourth-quarter revenue that rose by 11.8% to $2.74 billion, beating consensus estimates by $160 million, along with earnings of $1.44 per share, beating consensus estimates by 13 cents. Operating income was negatively impacted by increase in rail and other third-party purchase transportation costs and higher personnel-related costs.
Argus analysts believe that the company is well positioned to benefit from an economic recovery, according to a research note published on January 21, 2021. In addition to economic tailwinds, the analyst noted the company’s strong balance sheet and reinstated share repurchasing program designed to generate shareholder value.
The company raised its quarterly dividend by 3.7% to $0.28 per share, which represents a 0.8% forward yield. The dividend is payable on February 19, 2021, to shareholders on record as of February 5, 2021.
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