Jacobs Solutions Posts Steady Growth Despite Lagging Returns
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Jacobs Solutions' return on equity (ROE) is 10%, meaning it generates $0.10 in profit for every $1 of shareholders' equity. This is below the industry average of 13%.
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However, Jacobs Solutions has grown its net income at an impressive 30% over the past 5 years, higher than the industry growth rate. This suggests efficient management and reinvestment of profits.
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Jacobs Solutions retains a high 77% of its profits for reinvestment to fuel earnings growth, as reflected in its low 23% payout ratio.
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Jacobs Solutions has a long history of paying dividends for 7 years. Its future payout ratio is expected to drop to 13% as ROE rises to 16%.
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Despite the expected earnings growth slowdown, Jacobs Solutions seems to have positive aspects in its reinvestment of profits and earnings growth history. However, its valuation may be complex.