J.B. Hunt Transport Services (NASDAQ:JBHT) has had a rough three months with its share price down 20%. But if you pay close attention, you might gather that its strong financials could mean that the stock could potentially see an increase in value in the long-term, given how markets usually reward companies with good financial health. In this article, we decided to focus on J.B. Hunt Transport Services' ROE.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
How Do You Calculate Return On Equity?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for J.B. Hunt Transport Services is:
16% = US$658m ÷ US$4.2b (Based on the trailing twelve months to March 2024).
The 'return' refers to a company's earnings over the last year. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.16.
Why Is ROE Important For Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
A Side By Side comparison of J.B. Hunt Transport Services' Earnings Growth And 16% ROE
To begin with, J.B. Hunt Transport Services seems to have a respectable ROE. Especially when compared to the industry average of 11% the company's ROE looks pretty impressive. Probably as a result of this, J.B. Hunt Transport Services was able to see a decent growth of 14% over the last five years.
As a next step, we compared J.B. Hunt Transport Services' net income growth with the industry and found that the company has a similar growth figure when compared with the industry average growth rate of 16% in the same period.
NasdaqGS:JBHT Past Earnings Growth June 4th 2024
Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. What is JBHT worth today? The intrinsic value infographic in our free research report helps visualize whether JBHT is currently mispriced by the market.
Is J.B. Hunt Transport Services Efficiently Re-investing Its Profits?
In J.B. Hunt Transport Services' case, its respectable earnings growth can probably be explained by its low three-year median payout ratio of 18% (or a retention ratio of 82%), which suggests that the company is investing most of its profits to grow its business.
Additionally, J.B. Hunt Transport Services has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 16%. Regardless, the future ROE for J.B. Hunt Transport Services is predicted to rise to 19% despite there being not much change expected in its payout ratio.
Summary
In total, we are pretty happy with J.B. Hunt Transport Services' performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. We also studied the latest analyst forecasts and found that the company's earnings growth is expected be similar to its current growth rate. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
JB. Hunt Transport Services（納斯達克股票代碼：JBHT）經歷了艱難的三個月，其股價下跌了20％。但是，如果你密切關注，你可能會發現，鑑於市場通常會獎勵財務狀況良好的公司，其強勁的財務狀況可能意味着該股的長期價值可能會增加。在本文中，我們決定重點介紹J.B. Hunt運輸服務的投資回報率。
股本回報率或投資回報率是對公司價值增長和管理投資者資金的有效性的考驗。簡而言之，投資回報率顯示了每美元從其股東投資中產生的利潤。
你如何計算股本回報率？
ROE 的公式是：
股本回報率 = 淨利潤（來自持續經營業務）÷ 股東權益
因此，根據上述公式，J.B. Hunt運輸服務的投資回報率爲：
16% = 6.58億美元 ÷ 42億美元（基於截至2024年3月的過去十二個月）。
“回報” 是指公司去年的收益。因此，這意味着公司每投資1美元，就會產生0.16美元的利潤。
爲什麼投資回報率對收益增長很重要？
到目前爲止，我們已經了解到，投資回報率是衡量公司盈利能力的指標。我們現在需要評估公司再投資或 “保留” 了多少利潤以用於未來的增長，這樣我們就可以了解公司的增長潛力。一般而言，在其他條件相同的情況下，股本回報率和利潤保留率高的公司比不具備這些屬性的公司的增長率更高。
J.B. Hunt Transport Services的收益增長和16％的投資回報率的並排比較
首先，J.B. Hunt 運輸服務公司的投資回報率似乎相當不錯。尤其是與行業平均水平的11％相比，該公司的投資回報率看起來相當可觀。可能正因爲如此，J.B. Hunt 運輸服務公司在過去五年中得以實現14％的可觀增長。
下一步，我們將J.B. Hunt Transport Services的淨收入增長與該行業進行了比較，發現與同期16％的行業平均增長率相比，該公司的增長數字相似。
NASDAQGS: JBHT 過去的收益增長 2024 年 6 月 4 日
收益增長是股票估值的重要因素。無論如何，投資者應設法確定預期的收益增長或下降是否已計入其中。這樣做將幫助他們確定股票的未來是樂觀還是不祥的。今天的 JBHT 值多少錢？我們的免費研究報告中的內在價值信息圖有助於可視化JBHT目前是否被市場錯誤定價。
J.B. Hunt 運輸服務是否有效地將其利潤再投資？
就J.B. Hunt Transport Services而言，其可觀的收益增長可能是由於其三年中位數派息率低至18％（或82％的留存率）來解釋，這表明該公司正在將大部分利潤投資於業務增長。
此外，J.B. Hunt Transport Services已在至少十年內派發了股息，這意味着該公司非常認真地與股東分享利潤。根據分析師的最新估計，我們發現該公司未來三年的派息率預計將穩定在16％。無論如何，儘管預計其派息率沒有太大變化，但預計J.B. Hunt運輸服務的未來投資回報率將升至19％。
摘要
總的來說，我們對J.B. Hunt Transport Services的表現非常滿意。具體而言，我們喜歡該公司以高回報率再投資其利潤的很大一部分。當然，這導致該公司的收益大幅增長。我們還研究了最新的分析師預測，發現該公司的收益增長預計與其當前的增長率相似。要了解有關公司未來收益增長預測的更多信息，請查看這份關於分析師預測的免費報告，以了解更多信息。
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Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論，我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議，也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意，我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之，華爾街沒有持有任何上述股票的頭寸。
