Jacobs Engineering Hikes Dividend to Boost Shareholders Value

As a shareholder-friendly measure, Jacobs Engineering Group Inc. J announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 11.8%.

Jacobs Engineering has raised quarterly dividend to 19 cents a share (or 76 cents annually) from the previous payout of 17 cents (or 68 cents annually). The increased dividend will be paid out on Feb 28, 2020 to its shareholders on record as of Jan 31, 2020. Notably, the dividend yield, based on the new payout and the last closing market price, is approximately 0.8%.  

In 2019, Jacobs Engineering raised its dividend by 13.3%. The company’s steady paying dividend history is likely to make it an attractive investment choice for value investors or those seeking a stable stream of investment income.

What’s Driving the Dividend Policy?

Jacobs has been generating high revenues and earnings, courtesy of it impressive performance. Ongoing contract wins, increased focus on high-value businesses and efficient project execution are the primary factors driving the company’s results. Moreover, robust performances in the company’s businesses — Critical Mission Solutions and People & Places Solutions — as well as solid backlogs added to the upside. Owing to these tailwinds, the company reported adjusted earnings per share of $1.48 in fourth-quarter 2019 and beat the Zacks Consensus Estimate of $1.28 by 15.6%.

Moreover, the company has robust prospects across most of the business segments, adding to its momentum. It has a robust pipeline of more than $30 billion through 2020.

Backlog at the end of fiscal 2019 was $22.57 billion, up 13.1% year over year. The backlog growth can be primarily attributed to the company capitalizing on CH2M and KeyW revenue synergies. Also, focus on infrastructure, aerospace, cybersecurity and technical building projects are expected to drive future growth and profitability.
Price Performance

Shares of Jacobs Engineering have surged 49.5% in the past year compared with the industry's 16.8% rise. The performance was backed by a solid earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in 10 of the trailing 12 quarters. Notably, earnings estimates for 2020 have moved up by nearly 0.6% in the past 30 days, which reflects analysts’ optimism over the company’s earnings growth potential.

Zacks Rank & Key Picks

Currently, Jacobs Engineering carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Construction sector include KB Home KBH,  M/I Homes, Inc. MHO and AECOM ACM. KB Home and M/I Homes sport a Zacks Rank #1, whereas AECOM carries a Zacks Rank #2 (Buy).

KB Home surpassed earnings estimates in all of the trailing four quarters, the average being 14.9%.

M/I Homes’ 2020 earnings are expected to rise 13%.

AECOM has three-five year expected earnings per share growth rate of 12.4%.

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