Last Update 3/10/25
J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) is a key player in the transportation and logistics industry, specializing in intermodal shipping, dedicated contract services, and truckload freight. The company has built a strong reputation for efficiency and innovation, helping businesses move goods across North America. While JBHT has recently faced some stock price declines, dividend investors might find it appealing for its steady income potential and history of growth.
Key Dividend Metrics
💰 Forward Annual Dividend Rate: $1.76
📈 Forward Annual Dividend Yield: 1.08%
💵 Trailing Annual Dividend Rate: $1.72
📊 Trailing Annual Dividend Yield: 1.05%
📅 5-Year Average Dividend Yield: 0.85%
🔄 Payout Ratio: 30.94%
📆 Dividend Date: February 21, 2025
⚠️ Ex-Dividend Date: February 7, 2025
Dividend Overview
J.B. Hunt isn’t the kind of stock that makes headlines for its dividend yield, but that doesn’t mean it’s not worth considering. With a current yield of 1.08%, it’s not a high-income powerhouse, but it has something even better—reliability.
A payout ratio of just under 31% means the company is keeping its dividend well within sustainable limits, using less than a third of its earnings to pay shareholders. That leaves plenty of room for reinvestment in growth while still rewarding long-term investors.
Looking at JBHT’s history, dividends have been on an upward trajectory. It has maintained a strong commitment to increasing payouts, showing that management values returning cash to shareholders. Compared to its 5-year average yield of 0.85%, today’s yield is slightly better, which could be appealing for those looking to lock in a bit more income.
Dividend Growth and Safety
For dividend investors, the most important factor isn’t just the yield—it’s whether the company can continue paying and increasing its dividend over time. In JBHT’s case, the dividend looks secure.
With operating cash flow of $1.48 billion and levered free cash flow of $592.73 million, the company has plenty of liquidity to sustain dividend growth. Cash on hand is relatively low at $46.98 million, but that’s not necessarily a red flag given the company’s strong cash flow generation.
JBHT has a history of steady dividend increases, which is what long-term investors want to see. The company takes a disciplined approach to payouts, increasing them at a manageable rate rather than stretching itself too thin. This approach helps ensure dividends remain sustainable even in tough economic conditions.
Chart Analysis
Price Action and Moving Averages
J.B. Hunt’s stock has been in a clear downtrend over the past several months. The 50-day moving average (light blue line) has been trending downward and remains below the 200-day moving average (dark blue line), reinforcing the bearish sentiment. This type of setup typically signals that the stock is in a prolonged period of weakness, and buyers have yet to regain control.
Recently, the stock has attempted a short-term bounce from its lows, closing at 163.45 after hitting an intraday low of 159.65. While this might suggest a temporary relief rally, the price remains below the 200-day moving average, which is a key level for long-term trend direction. If the stock fails to reclaim and hold above this level, further downside pressure could continue.
Volume and Market Participation
Trading volume has been relatively steady, with 980,223 shares exchanged on this session. A look at the volume bars over the past year shows a few significant spikes, particularly around May and October, indicating moments of increased trading interest. These spikes could be tied to earnings reports or broader market events, but the key takeaway is that volume tends to increase during sharp price movements.
Recently, volume has been declining, which suggests that there isn’t strong conviction behind the latest price move. If volume starts picking up alongside price gains, it would be a more convincing sign that a meaningful recovery is taking shape.
Relative Strength Index (RSI)
The RSI indicator at the bottom of the chart gives further insight into momentum. Earlier in the year, RSI hit overbought levels, aligning with the stock’s peak in November and December. Since then, RSI has cooled off and hovered in a lower range, reflecting the stock’s weakening price action.
Currently, RSI appears to be ticking higher, which could indicate that the stock is trying to regain some strength. However, it is still far from overbought territory, meaning there could be room for additional upside before hitting resistance.
Recent Candlestick Activity
Looking at the most recent candles, the past five sessions show a mix of indecision and a slight push upward. The most recent session saw a close at 163.45, which is above the open of 161.39, suggesting that buyers were able to step in and push the price higher intraday. However, the presence of wicks on both ends of the candles indicates ongoing tug-of-war between buyers and sellers.
The lower wicks on recent candles suggest that buyers are trying to defend this level, but without strong volume, it remains uncertain whether this bounce has enough strength to sustain a larger move. If the stock fails to push past resistance at the 50-day moving average, it may struggle to regain upward momentum in the near term.
Analyst Ratings
📊 J.B. Hunt Transport Services (NASDAQ: JBHT) has recently been the subject of various analyst evaluations, reflecting a mix of optimism and caution. The consensus among analysts is a moderate buy rating, with an average 12-month price target of $189.84, suggesting a potential upside of about 16.15% from the current share price.
🔼 Upgrades
📈 In January 2025, an investment firm raised its rating for J.B. Hunt from neutral to positive, setting a price target of $200. This upgrade was driven by the belief that J.B. Hunt is strategically positioned to capitalize on anticipated improvements in the freight market. Analysts pointed to stabilizing freight volumes and a potential recovery in intermodal shipping, which could boost the company’s revenue and profitability. Additionally, improvements in operational efficiency were cited as a key factor in their revised outlook.
🔽 Downgrades
📉 On the other hand, in April 2024, another firm downgraded J.B. Hunt’s rating from overweight to equal weight, adjusting the price target from $215 to $200. The downgrade stemmed from concerns over rising operational costs and a softer demand environment, which could pressure profit margins. Analysts noted that lingering economic uncertainties and fluctuating fuel prices might weigh on near-term earnings. Additionally, a slower-than-expected rebound in freight demand contributed to a more cautious stance.
📌 These mixed analyst perspectives highlight the dynamic nature of the transportation industry, influenced by factors such as market demand fluctuations, cost pressures, and broader economic conditions. While some see a recovery on the horizon, others remain cautious about near-term headwinds.
Earnings Report Summary
J.B. Hunt Transport Services recently released its fourth-quarter earnings, and while there were some challenges, the company showed resilience in a tough freight market. Let’s break down the key takeaways from the report.
Revenue and Profit Trends
The company brought in $3.15 billion in revenue for the quarter, which was about 5% lower than the same time last year. While a dip in revenue isn’t ideal, there was some good news—operating income actually increased 2% to $207 million, and earnings per share (EPS) went up 4% to $1.53 compared to last year’s $1.47.
Looking at the full year, revenue came in at $12.09 billion, reflecting a 6% decline from 2023. Operating income also took a hit, dropping 16% to $831 million, and EPS fell 20% to $5.56 from $6.97 in the previous year.
How Each Business Segment Performed
Intermodal (JBI) saw a 2% revenue decline, bringing in $1.6 billion. However, there was a bright spot—volume actually increased 5%, meaning more shipments were moving. The challenge here was that profits in this segment fell 10% to $117 million, mostly due to pricing pressure and some operational inefficiencies.
Dedicated Contract Services (DCS), which provides long-term trucking solutions to companies, also saw a 5% dip in revenue to $839 million. Despite this, operating income increased 5% to $90.3 million, thanks to improved efficiency and better utilization of existing contracts.
Integrated Capacity Solutions (ICS), which is JBHT’s brokerage business, had a rough quarter with a 15% drop in revenue, landing at $308 million. The reason? A 22% decline in load volume. On the upside, the segment cut losses from $24.9 million to $21.8 million, thanks to better profit margins and lower operating costs.
Final Mile Services (FMS), which focuses on last-mile deliveries, saw revenue slide 6% to $228 million. The silver lining? Profits in this segment actually rose 7% to $13.2 million, as JBHT focused on improving underperforming contracts and streamlining operations.
Other Key Takeaways
The company faced some cost pressures, particularly in equipment and insurance, but managed to offset these with lower transportation expenses. Interest expenses also came down as JBHT reduced its debt load.
Taxes were a little higher this quarter, coming in at an effective rate of 19%, up slightly from last year’s 17.9%. For the full year, the tax rate stood at 24.8%, with expectations that 2025 will fall in the 24% to 25% range.
Overall, J.B. Hunt is managing a challenging environment fairly well. While revenue declines across key segments are something to watch, improvements in operational efficiency and cost control are helping to keep profits steady.
Financial Health and Stability
A company’s ability to pay dividends depends on its overall financial health, and JBHT is in solid shape.
- Revenue (ttm): $12.09 billion
- Net Income: $570.89 million
- Debt-to-Equity Ratio: 44.58%
- Return on Assets (ROA): 6.15%
- Return on Equity (ROE): 14.06%
Debt is always something to watch, and JBHT’s debt-to-equity ratio of 44.58% is reasonable for an asset-heavy industry like transportation. The company has maintained profitability, and its return on equity at 14.06% shows that it is efficiently using shareholder capital.
One concern is that revenue declined 4.8% year-over-year in the most recent quarter. Earnings per share (EPS) still managed to grow slightly by 1.3%, but this slowdown in revenue should be monitored. If the trend continues, it could impact profit margins and dividend growth down the road.
Valuation and Stock Performance
JBHT is not a bargain stock, but it’s also not outrageously expensive. The trailing price-to-earnings (P/E) ratio sits at 29.40, with a forward P/E of 25.97. While these numbers suggest the stock is priced for moderate growth, it’s not trading at a deep discount.
Other valuation metrics:
- Price-to-Sales (P/S): 1.39
- Price-to-Book (P/B): 4.07
- Enterprise Value/EBITDA: 11.11
The stock has been trending lower recently, trading closer to its 52-week low of $153.12 rather than its high of $203.02. It’s also currently below its 50-day and 200-day moving averages, which could indicate some near-term weakness.
JBHT has a beta of 1.15, meaning it tends to move slightly more than the overall market. While that’s not extreme volatility, it does suggest the stock can see larger price swings than some lower-beta dividend stocks.
Risks and Considerations
No stock is without risks, and JBHT has a few worth considering.
- Economic Cycles: Transportation is a cyclical business, meaning JBHT’s performance depends on freight demand and overall economic conditions. If the economy slows, shipping volumes could decline, impacting revenue and profits.
- Rising Costs: Labor, fuel, and maintenance costs can eat into profit margins. While JBHT has managed expenses well, inflationary pressures remain a challenge.
- Competitive Landscape: JBHT faces competition from other trucking and logistics companies, as well as newer tech-driven freight platforms. Maintaining an edge through innovation and pricing will be key.
- Stock Valuation: Given its relatively high P/E ratio, JBHT may not have much room for error. Any earnings misses or downward guidance could lead to short-term stock price declines.
Final Thoughts
J.B. Hunt is the kind of stock that dividend investors looking for steady, long-term growth might appreciate. It’s not a high-yield stock, but it offers reliability and a strong history of dividend increases. With a conservative payout ratio, solid cash flow, and a disciplined management approach, the company is in a good position to continue rewarding shareholders.
At the same time, its valuation and recent revenue slowdown are worth considering. The company operates in a cyclical industry, and while it has weathered downturns before, investors should keep an eye on economic trends that could impact freight demand.
For those who value dividend consistency over high yields, JBHT remains a well-run business with a strong track record. As long as it maintains financial discipline and adapts to industry challenges, it has the potential to keep delivering for shareholders in the years ahead.
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