Last Update 5/27/25
KBR, Inc. has steadily transformed into a global leader in government services, space exploration, and sustainable technologies. With operations anchored in long-term, mission-critical contracts, the company delivers consistent earnings and cash flow, backed by a well-managed balance sheet and strong return on equity. Its pivot away from traditional engineering toward high-margin service segments has positioned it for reliable growth in key areas like defense and energy transition.
The stock offers a modest but growing dividend supported by a low payout ratio and healthy free cash flow. Management remains focused on disciplined capital allocation, strategic acquisitions, and digital transformation. For investors prioritizing stability, income, and long-term growth potential, KBR presents a well-rounded profile.
Recent Events
Over the past year, KBR stock has seen a pullback, losing over 20% from its 52-week high of $72.60. Shares now hover around $52, just above their 52-week low and roughly in line with the 50-day moving average, but still notably under the 200-day. That suggests the stock is trying to find its footing after the sell-off.
Yet the underlying business tells a much stronger story. Quarterly revenue is up 13% year over year, while earnings have jumped nearly 25%. Those aren’t the kind of numbers you’d expect from a slow-moving government contractor. Return on equity is especially impressive at over 28%, indicating solid execution and efficient capital use.
Cash generation has also been robust. The company posted about $456 million in levered free cash flow over the past twelve months. That’s a healthy cushion and gives KBR flexibility to keep rewarding shareholders without compromising growth initiatives.
Key Dividend Metrics
📈 Forward Dividend Yield: 1.29%
💵 Annual Dividend: $0.66
🧮 Payout Ratio: 20.64%
⏱ Ex-Dividend Date: June 13, 2025
📆 Next Dividend Payment: July 15, 2025
📊 5-Year Average Dividend Yield: 1.04%
🪙 Trailing Dividend Yield: 1.20%
📊 Dividend Growth Rate: Steady, measured increases over recent years
These numbers might not jump off the page for yield-chasers, but they reflect a very intentional approach to dividend policy—one built on sustainability rather than flash.
Dividend Overview
KBR’s 1.29% forward dividend yield isn’t going to blow anyone away, but it’s supported by a very manageable payout ratio of just over 20%. That’s where things start to look more attractive. With earnings on the rise and consistent free cash flow, this is a company that’s not only paying a dividend—it’s paying one it can afford to keep growing.
The dividend itself has been moving upward in a quiet but steady fashion. That’s good news for investors who prefer consistency over volatility. It’s not a company trying to grab attention with big increases, but rather one that understands the value of a reliable income stream for shareholders.
And with a 5-year average yield sitting at 1.04%, the current yield is a bit richer than usual. That may not seem like much, but for long-term holders, it could be a nice entry point.
Dividend Growth and Safety
This is the part dividend investors really care about: how dependable is the payout, and what are the odds it keeps growing?
From a safety standpoint, KBR looks solid. That low payout ratio gives the company plenty of breathing room. A lot of industrials and services companies operate with much higher ratios, so seeing KBR keep it in the low 20s is reassuring.
The one flag to keep an eye on is debt. KBR carries around $2.97 billion in debt, against $460 million in cash. That’s a high debt-to-equity ratio—over 200%. But given the nature of its contracts and stable customer base, mainly in government and defense, the debt seems manageable. Plus, cash flows are strong and recurring, which supports both debt servicing and dividend payments.
The company’s business model—anchored by long-term government agreements and technical services—provides predictability that’s rare in other sectors. Those contracts aren’t going anywhere fast, and they give KBR the ability to plan capital returns with more confidence than many peers.
When it comes to growth, KBR hasn’t made dramatic dividend hikes, but it’s been methodical. It’s been slowly raising the dividend over time, and that pace could accelerate if earnings continue climbing as they have. With EPS up nearly 25% and net income closing in on $400 million, there’s a lot of room to maneuver.
It’s also worth noting that institutions control over 100% of the float. That level of ownership often signals a preference for long-term performance and capital discipline. Insiders hold just over 1%, which isn’t huge, but it does mean management has some skin in the game.
All told, KBR isn’t aiming to be the next big dividend darling—but that’s not the point. What it offers is a grounded, financially disciplined approach to shareholder returns. The payout is well-supported, the growth potential is there, and the business is tied to high-visibility sectors like defense, climate technology, and space exploration.
For dividend investors looking to pair a modest yield with a dependable business model, KBR checks more than a few boxes. It’s not about income today—it’s about income that’s built to last.
Cash Flow Statement
KBR’s cash flow statement shows strong operating performance, with trailing twelve-month (TTM) operating cash flow reaching $469 million, up slightly from $462 million in the prior full year. This improvement reflects steady core operations and healthy project execution. Capital expenditures have remained controlled at $61 million in the TTM period, allowing the company to generate a solid $408 million in free cash flow. This figure marks one of KBR’s best free cash flow results in recent years, pointing to improved efficiency and operational consistency.
On the investing side, KBR spent heavily, with $796 million in outflows during the TTM, a substantial jump from prior years. This signals a significant allocation toward acquisitions or internal growth initiatives. Financing activities were notably robust, with $459 million of inflow. That includes $1.1 billion in new debt issuance, offset by $251 million in debt repayments and $313 million in share repurchases. The company clearly used debt markets strategically, balancing shareholder returns with capital flexibility. As of the latest period, KBR held $446 million in cash, reflecting a stable liquidity position despite aggressive investing.
Analyst Ratings
Goldman Sachs recently adjusted its stance on KBR, Inc., shifting the rating from Buy to Neutral 🟡 while keeping the price target steady at $55. This change was mainly driven by valuation concerns, as the stock had already climbed close to their projected price. Even with the downgrade, the firm acknowledged KBR’s solid financial footing and consistent dividend performance, indicating this wasn’t a shift in confidence, but rather a recalibration based on price levels.
Meanwhile, broader analyst sentiment still leans positive. The consensus rating from several firms is a Moderate Buy ✅, with an average 12-month price target of $68.86 📈. That suggests roughly 32% upside from current levels. The range of targets spans from $60 on the low end to $84 on the high end, showing a generally bullish view with room for upward momentum.
The downgrade appears to be a case of a stock reaching near-term expectations rather than a negative shift in fundamentals. KBR’s long-term outlook remains favorable in the eyes of most analysts, supported by a strong cash position, healthy free cash flow, and exposure to high-demand sectors like government services and defense.
Earning Report Summary
KBR kicked off the year with solid momentum, delivering strong results in its first quarter that showed the company is firmly on track with its 2025 outlook. Revenue came in at $2.1 billion, which is a 13% bump from the same period last year. Growth was pretty evenly spread between both of KBR’s core segments—Mission Technology Solutions and Sustainable Technology Solutions.
Strong Growth Across Segments
In the Mission Technology Solutions division, revenues rose 14%, driven in part by the LinQuest acquisition and solid execution on the HomeSafe military relocation program. The company also landed some major new contracts here, including a nearly $1 billion ceiling-value deal with the U.S. Space Force and another $85 million job from the U.S. Air Force to repair airfields. It’s clear that KBR is leaning into its defense and space contracts, which continue to be a strong growth engine.
The Sustainable Technology Solutions segment also delivered, with revenues increasing 12%. That growth was led by work on the Plaquemines LNG project, plus several new international wins in Australia, the Middle East, and Indonesia. This side of the business is becoming an increasingly important contributor, not just in revenue but in margin, delivering a hefty 22.5% EBITDA margin for the quarter.
From a profitability standpoint, things looked just as healthy. Adjusted EBITDA hit $243 million, a 17% improvement year over year. That pushed the margin up to 11.8%, while net income came in at $116 million, up a solid 25%. Adjusted earnings per share jumped to $0.98, which is a 27% increase from last year’s first quarter.
KBR didn’t hold back on returning cash to shareholders either. The company bought back $156 million worth of its own shares and paid out another $20 million in dividends during the quarter. It ended with operating cash flow of $98 million and a net leverage ratio of 2.6x, which is well within a manageable range.
Leadership Commentary and Outlook
CEO Stuart Bradie sounded confident in the quarter’s results and reiterated full-year guidance. KBR still expects revenues to land between $8.7 billion and $9.1 billion, with adjusted EBITDA in the $950 million to $990 million range. Adjusted EPS is projected to fall between $3.71 and $3.95.
Bradie pointed out that the company is seeing the benefits of its recent realignment efforts and is focused on staying nimble in a tricky macro environment. He also emphasized how the team is keeping a tight grip on costs while continuing to execute on key projects and strategic initiatives. That kind of discipline, especially with a diversified pipeline of projects, puts KBR in a good position moving forward.
Management Team
KBR’s leadership is guided by Stuart J. B. Bradie, who has held the CEO role since 2014. He brings more than 30 years of industry experience and has been the architect behind much of the company’s transformation into a leader in government services and high-tech engineering. Under his leadership, KBR has prioritized strategic acquisitions and disciplined execution, helping reposition the business toward higher-margin, longer-term service contracts.
Byron Bright serves as the Chief Operating Officer and plays a pivotal role in overseeing both of KBR’s primary business segments. With a background in the U.S. Air Force and a deep understanding of defense programs, Bright has been instrumental in helping KBR maintain its operational edge while aligning execution with strategy.
Greg Conlon leads as the Chief Digital and Development Officer. His responsibilities focus on modernizing KBR’s internal systems and advancing its digital transformation, especially in project delivery and engineering design. Rounding out the leadership team is Sonia Galindo, General Counsel, whose legal expertise ensures the company navigates the regulatory landscape with care while supporting ethical governance practices across the board.
Valuation and Stock Performance
KBR’s stock has seen a fair share of movement over the past year. It has traded between a low of $43.89 and a high of $72.60. Currently sitting around $52, the share price is closer to the lower end of its 12-month range, reflecting some of the recent volatility in the broader market and sector-specific challenges. Despite that, the company’s fundamentals remain solid.
On a valuation basis, KBR’s forward price-to-earnings ratio is roughly 13.25. This suggests that the stock is not overly stretched, especially considering the kind of earnings growth the company is delivering. The price-to-book ratio stands at approximately 4.68, indicating that investors continue to place a premium on KBR’s assets and future potential.
Wall Street analysts remain largely positive on the stock. The consensus 12-month price target is $68.86, pointing to a decent upside from current levels. There’s a general belief that the stock is undervalued relative to its long-term earnings power and market position, particularly given its exposure to defense, climate solutions, and space infrastructure.
Risks and Considerations
KBR operates in sectors that offer a steady stream of work, but that doesn’t mean the business is immune to risk. One of the most prominent concerns is its reliance on U.S. government contracts. While these contracts are often long-term and stable, they are also subject to political shifts, policy changes, and budget adjustments, all of which can impact future revenue.
Another consideration is project execution. KBR works on highly complex, often large-scale initiatives. Any delays, cost overruns, or scope changes can put pressure on margins and affect profitability. Managing these projects requires sharp oversight, something the company has generally done well—but it’s a risk that’s always in play.
There’s also the broader challenge of operating across international markets. Global operations bring opportunities, but also expose KBR to geopolitical tensions, currency volatility, and local regulatory environments. These factors can introduce uncertainty and potentially delay project starts or impact margins.
And like most public companies today, KBR is expected to demonstrate leadership in environmental, social, and governance issues. Investors are increasingly looking at how companies address sustainability, employee well-being, and corporate ethics. While KBR has made progress, it must continue to evolve on this front to meet growing stakeholder expectations.
Final Thoughts
KBR has shown that it can adapt and thrive in an evolving landscape. From government contracts to space tech and climate solutions, the company has carved out a strong position in several high-value sectors. The leadership team appears focused and forward-looking, driving innovation while maintaining disciplined operations.
Valuation looks attractive given the growth potential and analyst expectations, and the company’s consistent cash flow and dividend strategy offer added comfort for investors who value stability. While there are risks—political, operational, and global—KBR’s diversified portfolio and strategic focus provide a strong buffer.