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Is Transportation Giant J.B. Hunt And Its 0.8% Dividend A Buy?

Over the last couple months, I’ve shown you stocks to avoid…

Stocks to consider buying…

And some of the best stocks related to the coming Internet of Things…  Which you can find linked further below.

All these recommendations are to help you either avoid pain and terrible stocks.  Or to help you find potentially great stocks to invest in during this pandemic.

If you do both well, it helps you earn higher than average investment returns and build wealth.

Because the fewer investment losses you have the more capital you keep. And the more capital you keep the faster you compound your money.

To help you figure this out, today I answer – Is Transportation Giant J.B. Hunt And Its 0.8% Dividend A Buy? 

J.B. Hunt (JBHT) is one of North America’s largest above ground transportation services by revenue.

It moves freight by rail, truck, and brokerage services.

Its based in Lowell Arkansas.  It has a $15.4 billion market cap. And it pays a 0.8% dividend which is reason #1 to consider buying its stock.

J.B.  Hunt’s 0.8% Dividend

In the last decade, J.B. Hunt’s paid out a total of $7.60 per share in dividends.

At today’s share count of 107 million, that’s equal to $813.2 million paid out to shareholders in that time.

Plus, it grew its dividend 130% from $0.48 per share in 2010 to $1.07 per share now.  This is an annual dividend growth rate on average of 13% per year.

These regular payments help you earn more money for your retirement.  And the solid, stable, and growing dividends will help in any kind of prolonged economic issues like we’re dealing with today.

It can do this because it earns large profits.  Which is reason #2 to consider buying J.B. Hunt stock.

J.B. Hunt Earns Decent Profits

Over the last decade it earned an average operating income margin of 10% per year.  

I look for anything above 10% consistently. 

Another way to show this is with its free cash flow to sales ratio (FCF/Sales). Over the last decade its 2.3% per year on average.  

I call this the “Cash Machine” metric.

I look for anything above 5% on a consistent basis for the same reasons as I look for high operating profit margins above.  If a company surpasses both thresholds it makes it a great operating business that is safe and potentially valuable.

J.B. Hunt surpasses one of my thresholds but not the other… This lowers the margin of safety in buying it stock.

These profits also allow it to have low debt levels though.

J.B. Hunt Has Low Debt

As of this writing it has $320 million in cash compared to $1.3 billion in debt.

As a percentage of its balance sheet total liabilities make up 57%.

And its debt-to-equity ratio is 0.52.

These are all well below what I look for in an investment, which adds a huge margin of safety to potentially buying J.B. Hunt stock.

But what about its valuation?  Is it cheap enough to buy? 

J.B. Hunt IS NOT Cheap

With the markets at or near all-time highs you’d expect a good stock like J.B. Hunt to be selling at an enormous valuation.

Unfortunately, it is.

It’s P/E is 30.8.

Its P/CF is 14.6.

Its forward P/E is 23.8.

And its EV/EBIT is 23.

On all three metrics at the top, I look to buy investments below 20 to consider them undervalued.

And on EV/EBIT I look to buy stocks below 8.

These show that J.B. Hunt is massively overvalued right now.

And this means owning its stock gives you no margin of safety in investing terminology.

When you invest in stocks that have a margin of safety it makes the investment safer.  And it also means you should expect to earn higher returns owning it in the coming years.

The inverse of this is also true…

When you invest in a stock without a margin of safety it makes the investment riskier.  And it also means you should expect to earn less owning it going forward.

Because J.B. Hunt is overvalued, it makes owning its stock enormously risky.  And for this reason, I recommend you avoid buying it.


If you’re looking for a solid, safe, dividend paying, stable, and enormously profitable investment to buy consider J.B. Hunt… But only when its cheaper.

Use the following links to some of our recent articles to learn other ways to protect yourself and your investments in these uncertain times.

Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above

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