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Jack Henry & Associates Hikes Dividend by 7% After Mixed Q2 Results

Jack Henry & Associates Inc. (JKHY) is a leading provider of technology solutions for the financial services industry with 8,700 clients nationwide.

The company generated 41% of its revenue from processing, 29% of its revenue from outsourcing & cloud, 18% of its revenue from in-house support and 11% of its revenue from product delivery & services during the fiscal second quarter ended December 31, 2020.

Mixed Q4 Financial Results

Jack Henry & Associates reported fiscal second-quarter revenue that rose by 2.4% to $420.2 million, missing consensus estimates by $11.84 million, with GAAP earnings of $0.94 per share, beating estimates by seven cents.

Looking ahead, the company expects FY21 EPS of $3.85 to $3.90 per share, which was higher than the $3.80 per share consensus, although revenue expectations of $1.76 billion to $1.77 billion was at the low end of $1.77 billion consensus estimates.

Compass Point analyst Michael Del Grosso upgraded the stock from neutral to buy following the fiscal second-quarter financial results with a $175 price target, which reflects a 15% premium to the closing price on Tuesday, March 2, 2021.

The company raised its quarterly dividend by 7% to $0.46 per share, which represents a 1.21% forward yield. The dividend is payable on March 25, 2021 to shareholders on record as of March 8, 2021.

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