Jack Henry & Associates, Inc. - Growth & Income

Jack Henry & Associates, Inc. (JKHY) recently reported second quarter earnings per share that came in 14% above the Zacks Consensus Estimate. Estimates have been surging off the strong quarter, sending the stock to a Zacks #2 Rank (Buy).

The company also just announced that it was increasing its quarterly dividend by 11%. It currently yields 1.3%.

Company Description

Jack Henry & Associates provides integrated technology solutions that performs data processing for financial institutions. It is headquartered in Monett, Missouri and has a market cap of $2.7 billion.

Second Quarter Results

The company recently reported its results for the second quarter of 2011. Earnings per share came in at 42 cents, 5 cents ahead of the Zacks Consensus Estimate. It was a 20% increase over the same quarter last year.

Total revenue was up 15% year-over-year driven by a 29% increase in license revenue. Support and service revenue, which accounts for 88% of total revenue, grew 15%. Much of this growth was attributable to a 40% increase in electronic payments revenue.

Meanwhile, the gross profit margin remained steady at 42%, while operating income increased 16%.

Outlook

Analysts revised their estimates higher following the strong quarter. The Zacks Consensus Estimate for 2011 is $1.56, up from $1.49 before the earnings release. This represents a 13% increase over 2010 EPS.

The 2012 estimate also rose off the strong quarter from $1.63 to $1.71. This equates to 10% growth over 2011 EPS. It is a Zacks #2 Rank (Buy) stock.

Dividend

The company recently announced that it was increasing its quarterly dividend by 11%. The company has a history of consistently raising its dividend, and since 2000 it has raised it at a compound annual growth rate of 13.9%.

JKHY: Jack Henry & Associates, Inc.