Jones Lang LaSalle (JLL - Free Report) , better known as JLL, has a wide range of product and services and makes strategic investments to capitalize on market consolidations. Further, the company’s robust balance sheet, with a manageable debt position, is encouraging.
Moreover, a positive trend in estimate revisions reflects optimism over the company’s earnings growth prospects. Over the last 30 days, the Zacks Consensus Estimate for JLL’s current quarter and 2018 earnings have moved up 3.7% and 1.4%, respectively. As a result, the stock currently carries a Zacks Rank #2 (Buy).
The stock has rallied 7.9% over the past six months, outperforming the industry’s increase of 3%.
Here’s What Might Drive the Stock Higher
Organic & Inorganic Growth: JLL invests strategically so as to capitalize on market consolidations. The company’s superior operating platform and market share expansion have helped it achieve strong growth as well as generate decent cash level. Importantly, the company achieved compound annual fee revenue growth of 12% over the last ten years, ending Dec 31, 2017. Further, the top line is expected to grow significantly in 2018.
On the other hand, the company has made more than 110 mergers and acquisitions since 2005 through 2017. Further, the company continued with its opportunistic buyout strategy and completed three acquisitions during the first quarter of 2018. Moreover, it is increasingly investing in technology and data capabilities, which are likely to enable JLL to enjoy a competitive advantage over its peers. Such strategic acquisitions are likely to help the company gain strength to capitalize on an improving market environment.
Earnings per Share Strength: JLL recorded an earnings growth rate of 8.8% over the last three to five years compared with 1.7% growth of the industry. The company’s earnings growth rate for 2018 is anticipated to be 13.2%. Moreover, the long-term (three-five years) expected EPS growth of 11% promises rewards for shareholders.
The company also has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in all of the trailing four quarters. It delivered an average positive surprise of 32.2% for this period.
Steady Capital Deployment: JLL has been consistently raising dividend since 2011 and aiming at enhancing shareholders’ value. Concurrent with first-quarter 2017 earnings, the company announced a semi-annual dividend of 35 cents per share on its common stock, marking 6% hike over the last payment. Again, during third-quarter 2017 earnings release, JLL’s board of directors announced a dividend of 37 cents per share, reflecting 5.7% increase from the previous payout. Subsequently, dividends for 2017 totaled 72 cents, a 13% increase from the year-ago figure. Further, concurrent with first-quarter 2018 earnings, the company increased its dividend by 11% to 41 cents. Given its financial strength and lower-payout ratio, this dividend payment is expected to be sustainable.
Superior Return on Equity (ROE): JLL’s ROE of 13.67% compared with the industry average of 4.79% reflects the company’s commendable position over its peers.
Strong Balance Sheet: JLL’s robust balance sheet helps it manage debt-level in an efficient way. Notably, as of Mar 31, 2018, the company enjoyed unsecured revolving credit facility of $2.75 billion. In May, JLL amended this credit facility and extended maturity from June 2021 to May 2023. This will likely enhance its financial flexibility. At the end of the first quarter JLL’s net debt was successfully brought down by $477.8 million from the prior-year figure. The year-over-year improvement reflects a significant progress in the company’s business performance and working-capital management. Backed by a solid balance sheet and a healthy debt-position, the company remains well poised to continue with its growth momentum.
Other Stocks Worth a Look
A few other top-ranked stocks from the same space are Colliers International Group Inc. (CIGI - Free Report) , Newmark Group, Inc. (NMRK - Free Report) and Vonovia SE Unsponsored ADR . All the stocks carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Colliers International’s Zacks Consensus Estimate for 2018 remained unchanged at $3.60 in a month’s time. Its shares have returned 34.3% over the past year.
Newmark Group’s Zacks Consensus Estimate for the current year has risen 3.4% to $1.53 in the last month. Its shares have gained 2% in a year’s time.
The Zacks Consensus Estimate for 2018 earnings of Vonovia has remained stable at $1.19 over the past month. Its shares have increased 21.6% over the past year.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>