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Jack Henry Shores Up Quarterly Dividend By 7%; Street Sees 19% Upside

Jack Henry & Associates raised its quarterly cash dividend by 7% to $0.46 per share.

Jack Henry (JKHY) announced that the new dividend will be paid on March 25, to shareholders of record as of March 8.

The technology solutions and payment processing services company’s annual dividend of $1.84 per share now reflects a dividend yield of 1.26%.

Jack Henry CFO Kevin D. Williams said, “This increase in our dividend authorization evidences our continued confidence that these trends will continue and our commitment to deploy our cash to the benefit of our shareholders.” (See Jack Henry stock analysis on TipRanks)

Last week, Jack Henry reported fiscal second-quarter results. The company’s 2Q non-adjusted earnings remained stable year-over-year at $0.94 per share but outpaced Street estimates of $0.87. Adjusted revenues increased 2% to $420.2 million but missed analysts’ expectations of $432.71 million.

As for fiscal 2021, the company expects adjusted revenues in the range of $1.73 billion to $1.74 billion. Non-adjusted EPS is anticipated in the range of $3.85 to $3.90.

On Feb. 10, Raymond James analyst John Davis trimmed the stock’s price target to $179 (24% upside potential) from $196 and maintained a Buy rating “following” the company’s “F2Q21 results that came in softer than expected on the top line, but was more than offset by a better margin, resulting in EPS upside.”

“While the big picture hasn’t really changed given the reiterated revenue outlook and increased EPS guide (+$0.10), unfortunately JKHY has turned into somewhat of a show me story and patience is required as the company will likely need to print the acceleration before investors give them credit,” Davis added.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 analysts suggesting a Buy and 4 analysts recommending a Hold. The average analyst price target of $171.60 implies about 19% upside potential to current levels.

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Priti Ramgarhia
Priti Ramgarhia from Kolkata, India, has over fourteen years of experience in the equity research domain. Over the years, she has worked with a team on research reports and writing financial blogs, covering various industries and geographies. She is a post-graduate, with a Masters in Commerce from Calcutta University and a Masters in Finance from ICFAI.