Last update 5/27/25
Jacobs Solutions Inc. operates at the intersection of engineering, infrastructure, and technology, serving a mix of public and private sector clients across the globe. The company has steadily built a reputation for delivering complex projects in sectors like transportation, energy, water, and life sciences. With a \$15 billion market cap and a strong order backlog of \$22.2 billion, Jacobs continues to show resilience and forward momentum, even amid shifting economic conditions.
Led by CEO Bob Pragada and a seasoned management team, Jacobs combines operational discipline with a strategic focus on high-growth areas. Recent earnings reflect consistent revenue growth and healthy cash flow, while the dividend, now yielding just over 1%, has shown a steady upward trend.
Recent Events
Jacobs Solutions Inc. is the kind of company that quietly powers much of the world behind the scenes. From complex infrastructure projects to defense and environmental consulting, Jacobs has its hands in work that’s not just important—it’s essential. Over the years, the company has shifted gears, moving from traditional engineering toward more tech-driven and government-centric contracts. That pivot has helped anchor its long-term stability.
This past quarter, which ended March 28, 2025, gave investors a bit of a mixed bag. Revenue came in at $11.69 billion over the last twelve months, a modest 2.2% increase from the year before. But what raised eyebrows was a sharp drop in quarterly earnings growth—down 96.5% year-over-year. Now, on paper, that sounds alarming. But when a company like Jacobs works across multi-year contracts and complex government partnerships, earnings can fluctuate without necessarily signaling deeper issues.
Financially, Jacobs continues to maintain a solid foundation. The company holds $1.38 billion in cash and carries $3.12 billion in total debt, resulting in a manageable debt-to-equity ratio of 66.36%. The balance sheet looks clean, and there’s no real sign of stress.
In terms of shareholder activity, a recent 101:100 stock split on May 16, 2025, keeps shares liquid and accessible. And with the next dividend payment lined up for June 20, it’s clear Jacobs intends to maintain its track record of returning cash to shareholders.
Key Dividend Metrics
📈 Forward Dividend Yield: 1.02%
💰 Forward Annual Dividend Rate: $1.28
🧮 Payout Ratio: 39.27%
🔄 5-Year Average Yield: 0.75%
📅 Ex-Dividend Date: May 23, 2025
💵 Next Dividend Payable: June 20, 2025
⏳ Trailing Yield: 0.94%
🔍 Dividend Growth: Steady and Reliable
Dividend Overview
Jacobs isn’t trying to impress with a flashy dividend. And that’s okay. The current yield of just over 1% might not stand out in a screen of high-yield names, but it speaks to something more important—discipline.
The company is committed to its dividend, and it’s not stretching to maintain it. With a payout ratio of just under 40%, Jacobs is balancing shareholder returns with reinvestment in its own growth. That’s the sweet spot for dividend investors looking for durability over decadence.
This approach makes Jacobs particularly appealing for those who don’t need maximum income today, but care about sustainability over time. There’s also a bit of predictability in how Jacobs handles its capital returns. The dividend isn’t likely to swing wildly in either direction—making it easier to plan, especially for those who rely on their investments to generate regular income.
Another detail worth highlighting is the trailing annual dividend of $1.19 and the forward dividend of $1.28. That small but meaningful increase suggests the company is confident in its ability to keep cash flowing even as earnings fluctuate.
Dividend Growth and Safety
Jacobs may not be the first name that comes to mind when thinking about dividend growth, but it’s carved out a reliable pattern. Over the last few years, the dividend has moved up at a consistent, measured pace. That’s reflected in the company’s 5-year average dividend yield of 0.75%—a number that’s grown more appealing as recent hikes push the current yield higher.
Safety is where Jacobs really earns its stripes. Levered free cash flow came in at $1.29 billion, more than enough to cover the dividend multiple times over. That kind of coverage is a green flag for income-focused investors. Operating cash flow sits at $690 million, which still comfortably supports the payout. These numbers point to a dividend that isn’t just surviving—it’s being paid out from a position of strength.
It’s also worth noting the low volatility here. Jacobs carries a beta of 0.76, meaning its stock tends to move less dramatically than the broader market. For investors who prefer to avoid the rollercoaster, this kind of stability is a major plus.
Ownership structure adds another layer of confidence. With over 89% of shares held by institutions and only a small insider holding, there’s a clear message: large, long-term investors see Jacobs as a steady performer.
While Jacobs isn’t a high-yield play, it doesn’t have to be. Its dividend policy favors consistency, sustainability, and gradual growth. For dividend investors who want a calm, reliable paycheck from a company doing critical work, Jacobs is well worth a spot on the radar.
Cash Flow Statement
Jacobs Solutions generated $690 million in operating cash flow over the trailing twelve months, a noticeable dip from the prior year’s $1.05 billion but still strong enough to support ongoing business needs and shareholder returns. Free cash flow followed a similar path, coming in at $586 million compared to over $933 million the year before. While there’s a year-over-year pullback, the overall cash-generating ability of the business remains intact, particularly given its $1.2 billion cash position.
On the investing side, outflows totaled around $94 million, much lighter than in previous years, reflecting a slowdown in capital deployment or fewer acquisitions. Capital expenditures stayed in check at $104 million, keeping investment priorities focused. The more substantial movement came through financing activities, with cash outflows of $414 million. This includes continued debt repayments and stock repurchases, signaling a deliberate strategy to reduce leverage and return capital to shareholders. Despite reduced inflows, Jacobs continues to preserve liquidity, maintain discipline in spending, and generate more than enough free cash flow to keep the dividend safe and steady.
Analyst Ratings
Jacobs Solutions has seen a flurry of analyst activity recently, reflecting a mix of optimism and caution. 📊 The consensus 12-month price target now sits at $150.86, suggesting a potential upside of nearly 20% from current levels. This average is drawn from a range of estimates, with the highest at $160 and the lowest at $141. 🎯
In early May, Truist Securities raised its price target from $130 to $141 while maintaining a Hold rating, indicating a more favorable view of the company’s prospects. 📈 On the other hand, UBS trimmed its target slightly from $154 to $152, citing short-term pressure from recent earnings softness. Meanwhile, RBC Capital bumped its target up from $152 to $154 and reaffirmed its Outperform rating, showing confidence in Jacobs’ longer-term strategy. 💼
Citigroup also revised its target downward from $161 to $151 but kept a Buy rating. While acknowledging the recent slowdown in earnings growth, they pointed to strong cash flow generation and a compelling pivot toward sectors like water infrastructure, life sciences, and cybersecurity. 🔧 Analysts are clearly adjusting their outlooks based on Jacobs’ evolving revenue mix and the company’s effort to focus more sharply on areas with long-term demand tailwinds. 📐
Earning Report Summary
Jacobs Solutions delivered a quarterly update that mixed steady performance with a few financial curveballs. While revenue growth came in positive and certain segments continued to gain traction, a large investment-related charge impacted the bottom line. Still, leadership sounded confident about the road ahead.
Top-Line Performance Holds Up
For the quarter, Jacobs pulled in $2.91 billion in revenue, a 2.2% bump from the same period last year. Adjusted net revenue saw slightly better momentum, growing 3.1% year-over-year. The Infrastructure & Advanced Facilities segment did a lot of the heavy lifting, contributing $2.6 billion, while PA Consulting also turned in a solid performance with revenue climbing to just over $307 million. The backlog was one of the stronger signals of future demand—it hit $22.2 billion, up 20% from last year.
Earnings Take a Hit from Investment Impact
Despite the growth on the top line, net income fell to $11.2 million. This wasn’t due to poor operations but came from a $109.5 million mark-to-market loss tied to Jacobs’ investment in Amentum. Excluding that, adjusted earnings per share looked much healthier, rising to $1.43 from $1.17 a year earlier.
Leadership Remains Optimistic
CEO Bob Pragada talked up the momentum the company is seeing across key markets like Life Sciences, Energy & Power, and Transportation. He emphasized the strength of Jacobs’ bookings pipeline and the quality of the work the company is winning. CFO Venk Nathamuni echoed the positive outlook, highlighting strong operational execution and reiterating their full-year guidance.
Jacobs has been active in returning capital to shareholders, buying back $351 million worth of shares during the quarter and $552 million in total so far this fiscal year. On the financial health front, they’ve also been cleaning up the balance sheet. That included retiring $312 million in debt through an equity-for-debt exchange and refinancing another $700 million at more favorable terms.
Guidance Reaffirmed
The company isn’t dialing back its expectations. Full-year 2025 guidance remains intact with mid-to-high single-digit revenue growth projected, EBITDA margins expected in the 13.8% to 14% range, and earnings per share targeted between $5.85 and $6.20. Jacobs also believes it can convert more than 100% of net income into free cash flow for the year.
Management Team
Jacobs Solutions is led by Bob Pragada, who serves as both Chair and Chief Executive Officer. With over three decades of global business leadership and military experience, including 17 years with Jacobs and nine years as a Civil Engineer Corps and Seabees Officer in the U.S. Navy, Pragada brings a depth of experience and a steady hand at the helm.
Venk Nathamuni, the Chief Financial Officer, plays a critical role in shaping the company’s financial direction and execution. His leadership in capital management and long-term planning continues to underpin Jacobs’ strategic decisions. Joanne Caruso, as Chief Legal and Administrative Officer, helps ensure that the company operates with integrity and compliance across all its global operations.
Patrick Hill, President of Global Operations, oversees the implementation of major projects worldwide, while Shannon Miller leads as Strategy, Growth and Digital Officer, bringing a forward-thinking vision to Jacobs’ transformation and innovation efforts. Together, the executive team presents a blend of operational depth, financial rigor, and strategic foresight.
The broader Board of Directors complements this leadership with a strong lineup of professionals from various industries. Individuals like Louis Pinkham and Priya Abani add diverse perspectives that help guide the company’s governance and long-term outlook.
Valuation and Stock Performance
Jacobs Solutions currently trades at $125.85, placing it roughly 15 percent below its 52-week high of $149.05. This discount could catch the eye of investors who see room for the stock to climb back toward its recent highs. The stock has held up reasonably well through recent market volatility, reflecting the resilience built into its business model.
The company’s market cap stands at $15.12 billion, placing it firmly in mid-to-large cap territory. Over the past year, its performance has outpaced broader benchmarks at times, thanks to strong demand across infrastructure, consulting, and engineering sectors. While not immune to broader economic pressures, Jacobs has continued to generate interest from institutional investors, in part due to its recurring revenue streams and diversified project portfolio.
The average analyst price target for the stock is $150.86. That figure implies a double-digit upside from current levels. Analysts appear to be focusing on Jacobs’ stable cash flow, large project backlog, and progress in high-growth areas like digital infrastructure and sustainable energy.
Risks and Considerations
Jacobs is not without its challenges. The recent spin-off of its Critical Mission Solutions business and related financial adjustments, such as the receipt of shares in Amentum Holdings, have added complexity to the balance sheet. While the transaction was meant to streamline operations and enhance focus, it introduces some financial uncertainty in the near term.
The company also faces the typical risks that come with global operations, including regulatory shifts, currency fluctuations, and geopolitical developments. These elements can delay projects or add costs unexpectedly. Competitive pressure in the engineering space remains intense, and Jacobs must continue investing in technology and talent to maintain its edge.
Labor shortages, rising input costs, and shifting government budgets—especially in public infrastructure—could also impact near-term performance. Despite a strong order book, execution risk remains present, especially in a macroeconomic environment that remains uncertain.
Final Thoughts
Jacobs Solutions offers a balanced picture. It’s a well-run company with an experienced leadership team and a diversified footprint across resilient sectors. Its current valuation suggests that some caution is already priced in, yet the long-term story remains intact.
With steady free cash flow, a manageable debt load, and consistent demand in core markets, Jacobs continues to position itself as a solid operator in a challenging industry. For investors who value consistency, responsible management, and a forward-looking strategy, Jacobs is worth paying attention to. As always, weighing potential risks against the company’s strong fundamentals is key when evaluating where it fits within a portfolio.