Jabil, Inc. (NYSE:JBL) has indicated that their president Mr. William Peters is expected to retire at the end of 2018. This comes at the back of the company increasing in value as shareholders are scheduled to benefit from high profits as a result of high sales and the ongoing dividend program.
The retirement of the president
Peters has been at the company for close to three decades, and the notification for retirement follows a filing at the SEC on October after he notified JBL’s board of directors of his decision to retire at the end of 2018.
He has had an illustrious career with JBL and had been president of the company for over five years since 2013. However, before becoming president, he served as the human resource and development vice president from 2010. He has previously served in other roles in the company such as being the operations vice president as well as serving as America’s regional president.
Shareholder benefiting from the dividend payment
The dividend program started in 2006 and shareholders have helped through the following increase in revenue growth by 14.3% by 2011 raising it to 8 cents for each share. JBL dividend yield remained relatively constant but it has since increased by 1.32%, and it looks convincing to the shareholders since they make the payment regularly.
The regularity of JBL dividend payment makes it distinctive in the tech sector because a majority of technology companies do not offer regular dividends owing to high operational costs as well as research and development expenses.
JBL has managed to maintain the consistent dividend payment because of diversification of their product portfolio regarding design and production for various market sectors.
High sales turnover
The dividend payment program has been made possible by the high sales that JBL makes that have been growing steadily. In the past five years, JBL sale has had a 5.4% growth yearly.
The high sales turnover each year is a result of their corporate diversification strategy that has enabled them to venture into new industry markets
The strong sales results are driven by end markets such as healthcare, the automobile industry as well as investment in wireless 5G networks and cloud from which JBL earned $6.5 billion in the Q1 of the 2019 fiscal year.
Projections indicate that by the end of the 2019 fiscal year they expect to have an increase in annual sales in a tune of $24.94 billion which will lead to higher cash flows and earning and thus increase in dividend for shareholders.
For the 2019 fiscal year, JBL expects to continue to maximize shareholder value through cash flow and earnings apart from the dividends. Future estimates indicate that the company’s diluted EPS will be $2.99 for the 2019 fiscal year which will be an increase of 14% from last year. Earnings are expected to continue increasing for subsequent years at a rate of 12%.
Currently, JBL’s shares trade at $24.76 with a negligible change in the stock price of $-0.03. The daily range indicates a low of $24.21 and a high of $24.83 with share volume of 2.9 million. Their market capitalization is $3.91 billion, and they had a 52-week movement of between a low of $21.49 and a high of $31.77.
JBL has a strong financial balance sheet with the most relevant strength indicators being their cash per share earnings of $5 that is 15.5 times the yearly dividend at a 3.92 interest ratio. Therefore this indicates the healthy and robust position of JBL regarding invested capital return that is 6.11% against the capital cost of 4.82%.