By Rob Otman
Jacobs Engineering (NYSE: JEC) is a mid cap company that operates within the construction and engineering industry. Its market cap is $7 billion today, and the total one-year return is -0.11% for shareholders.
Jacobs Engineering stock is underperforming the market. It’s beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: Jacobs Engineering reported a recent EPS growth rate of 27.59%. That’s below the construction and engineering industry average of 87.78%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the construction and engineering industry is 29.25. And Jacobs Engineering’s ratio comes in at 18.94. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for Jacobs Engineering stock is 6.65%. That’s below the construction and engineering industry average of 81.32%. The company is less leveraged.
✓ Free Cash Flow per Share Growth: Jacobs Engineering’s FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✗ Profit Margins: The profit margin of Jacobs Engineering comes in at 3.54% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Jacobs Engineering’s profit margin is below the construction and engineering average of 5.33%. So that’s a negative indicator for investors.
✗ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Jacobs Engineering is 5.3%, and that’s below its industry average ROE of 14.03%.
Jacobs Engineering stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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Source:: Investment You
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