Jabil (JBL) Memo Assignment
Name:
Institution:
Jabil (JBL) Memo Assignment
To:
From:
Date: February 11, 2014
Re: Jabil (JBL) Five Years DuPont Analysis
An ideal benchmark for Jabil Inc. is Benchmark Electronics, which is in the same market. Your company is an electronics company, engaged in services such as providing electronic designs, production and management of products to companies within the automotive, computing, defense, industrial, medical and networking amongst others (Jabil Circuit Inc, 2014). Benchmark Electronics provides services that include integrated electrical manufacturing, designing and engineering services. It also provides contract manufacturing to various clients. Being in the same industry means having similar assets and risks, which makes this company an appropriate benchmark for your firm.
Your dividend policy has been consistent over time. It grew October 2011 when it increased to 0.08 from 0.07 over the previous years. Currently, it has maintained at this position. The company pays its dividends within a period of two months after declaration (NASDAQ, 2014). Since 2009, Jabil has always paid its dividends within this time and in some cases, in a shorter period. In addition, it pays the dividends after every quarter. Benchmark Electronics on the other hand has not paid any dividends in the previous five years, which indicates a dividend is pending (Benchmark Electronics, 2012).
| Ex/eff date | Type | Cash amount | declaration | Record date | Payments date |
| 2/12/2014 | Cash | 0.08 | 1/22/2014 | 2/14/2014 | 3/3/2014 |
| 11/13/2013 | Cash | 0.08 | 10/17/2013 | 11/15/2013 | 12/2/2013 |
| 8/13/2013 | Cash | 0.08 | 7/18/2013 | 8/15/2013 | 9/3/2013 |
| 5/13/2013 | Cash | 0.08 | 4/16/2013 | 5/15/2013 | 6/3/2013 |
| 2/13/2013 | Cash | 0.08 | 1/24/2013 | 2/15/2013 | 3/1/2013 |
| 11/13/2012 | Cash | 0.08 | 10/16/2012 | 11/15/2012 | 12/3/2012 |
| 8/13/2012 | Cash | 0.08 | 7/19/2012 | 8/15/2012 | 9/4/2012 |
| 5/11/2012 | Cash | 0.08 | 4/19/2012 | 5/15/2012 | 6/1/2012 |
| 2/14/2012 | Cash | 0.08 | 1/25/2012 | 2/16/2012 | 3/1/2012 |
| 11/10/2011 | Cash | 0.08 | 10/20/2011 | 11/15/2011 | 12/1/2011 |
| 8/11/2011 | Cash | 0.07 | 7/21/2011 | 8/15/2011 | 9/1/2011 |
| 5/12/2011 | Cash | 0.07 | 4/13/2011 | 5/16/2011 | 6/1/2011 |
| 2/11/2011 | Cash | 0.07 | 1/19/2011 | 2/15/2011 | 3/1/2011 |
| 11/10/2010 | Cash | 0.07 | 10/21/2010 | 11/15/2010 | 12/1/2010 |
| 8/12/2010 | Cash | 0.07 | 7/22/2010 | 8/16/2010 | 9/1/2010 |
| 5/13/2010 | Cash | 0.07 | 4/14/2010 | 5/17/2010 | 6/1/2010 |
| 2/11/2010 | Cash | 0.07 | 1/20/2010 | 2/16/2010 | 3/1/2010 |
| 11/12/2009 | Cash | 0.07 | 10/22/2009 | 11/16/2009 | 12/1/2009 |
| 8/13/2009 | Cash | 0.07 | 7/16/2009 | 8/17/2009 | 9/1/2009 |
| 5/13/2009 | Cash | 0.07 | 4/23/2009 | 5/15/2009 | 6/1/2009 |
| 2/12/2009 | Cash | 0.07 | 1/21/2009 | 2/17/2009 | 3/2/2009 |
This is an appropriate dividend policy for your company because the shareholders receive cash for their investment after every quarter. For the firm, it portrays a good image in terms of dedication to owners of the company. Compared to Benchmark Electronics that does not pay dividends, this Jabil Inc. is ideal for investors interested in realizing returns. Additionally, paying a high dividend indicates that your company is making profits every year, which attracts even more investors. Lack of paying dividends could indicate that a company is not profitable. The dividend is also a sign of the company’s well-being.
From the financial statements, your capital structure of Jabil Inc is made of debt and owners equity. The owners’ equity is made up of common stock, retained earnings and capital surpluses. The total equity of the firm is $2,335,852,000 while the long-term debt is $1,690,426,000 (uk.finance.com, 2014). Benchmark Electronics is financed by a long-term debt and an owners’ equity made up of the same components as Jabil Inc. The total owners’ equity for Benchmark Electronics is $1,139,525,000 while the long-term debt is $10,103,000 (uk.finance.com, 2014). It is clear that Jabil has tried to balance its capita structure compared to Benchmark Electronics that has only 1% of debts in its financing options. This is represented in the pie charts below.
The ratio used in assessing the capital structure is equity to long-term debt. This was used in deriving the percentages represented in the pie charts. The market value of both companies is higher than the book values, which indicates a favorable market. The shares of the companies have continued to grow compared to the book values. This is a good capital structure for Jabil compared to Benchmark Electronics. One of the reasons is the balance in its financing options, a high retained earning and payment of dividends.
Yours truly,
References
Benchmark Electronics (2012). United States Securities and Exchange Commission Form 10-K. retrieved from http://www.bench.com/InvestorRelations/AnnualReports/Benchmark_Annual%20Report_2012.pdf
Jabil Circuit Inc, (2014). United States Securities and Exchange Commission Form 10-K. Retrieved from http://www.otcmarkets.com/edgar/GetFilingPdf?FilingID=9572481
NASDAQ (2014). Jabil Circuit, Inc. Dividend Date & History. Retrieved from http://www.nasdaq.com/symbol/jbl/dividend-history
uk.finance.com, (2014). Benchmark Electronics Inc. (BHE). Retrieved from http://uk.finance.yahoo.com/q/bs?s=BHE&annual