Is the JB Hi-Fi Share Price Stalling Despite Bumper Sales? (ASX:JBH)

Electronics retailer JB Hi-Fi Ltd [ASX:JBH] is trading higher today thanks to solid results posted in its half-year report.

At time of writing the JBH share price is up 2.04%, or $1.04, to trade at $51.93.

ASX JBH Share Price Chart - JB Hi-Fi Ltd

Source: Trading View

The retailer also announced a big boost to its interim dividend, seeing it almost double from last year’s interim payout.

However, with the Australian economy recovering at a solid pace and government handouts set to dry up, are investors cooling on their outlook for JBH?

Is there still value in JB Hi-Fi Share Price?

It is a question I believe many investors will be asking themselves, especially given the relatively small movement in the share price today.

For income investors there could still be some nice value in there.

JBH announced today that it would be boosting its interim dividend by 81.8% to 180 cents per share, fully franked.

Meaning that the full-year dividend could double last year’s 189-cent full-year dividend.

Not bad.

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Total sales grew by 23.7% to $4.9 billion in the half year to December 2020, with hardware sales and services up 26%, offsetting a 5.6% decline in software sales.

As expected, online sales supported this growth, up 161.7% to $678.8 million.

Representing 13.7% of total sales across the group.

Earnings before interest and tax came in at a hefty $462.7 million, an increase of 76%.

JBH said they were boosted by strong operating leverage from elevated sales and margins, and tight cost control.

And the kicker, net profit after tax improved by 86.2% to $317.7 million.

Although these seem like staggering growth figures, they are actually in line with market forecasts.

And analysts aren’t betting on consensus to move much given the results today.

It’s a bet on where Aussies spend their cash

Last month, JBH CEO Richard Murray said his business was benefiting from a redirection of discretionary spending.

Adding he thought it was likely to continue for many months because confidence in overseas travel would be rebuilt only gradually.

And international travel could remain off the cards for this year too.

Which means that investing for value right now is determining where Aussies will spend their cash next.

If an effective vaccine is rolled out next month, there are hopes we could see international travel return late in the year.

Meaning shares like Qantas Airways Ltd [ASX:QAN] or Sydney Airport Ltd [ASX:SYD] could represent some deeper value.

If not, JBH and its retailer peers could continue their march upwards in the stock ticker.

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Lachlann Tierney,
For The Rum Rebellion

Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

The Rum Rebellion