Jack Henry & Associates provides software and hardware that helps banks and
credit unions serve their customers. 
Photo courtesy GotCredit/flickr.com.

About Jack Henry & Associates

Jack Henry & Associates provides information technology and processing services to small to mid-size banks and credit unions. The company is headquartered in Monett, Missouri and employs nearly 5,500 people. Jack Henry & Associates was founded in 1976 and currently serves over 11,300 clients.

The company focuses its business on three distinct brands: Jack Henry Banking, Symitar and ProfitStars.

Jack Henry Banking provides data processing systems to more than 1,200 small and mid-size banks with individual assets up to $30 billion, which represents 17.6% of the total market of 6,800 small and mid-tier banks (according to the FDIC). Jack Henry Banking assists its client banks to provide services to their retail and business clients, along with supporting internet banking, electronic funds transfers and bank management.

The Symitar brand provides similar services as the Jack Henry Banking brand, but to credit unions rather than banks. Symitar has 780 credit union customers. The ProfitStars brand provides specialized products and services to other financial services. The revenue is smaller than the other two brands, but across far more customers, with ProfitStars serving 10,800 domestic and international customers. ProfitStars provides complimentary information technology platforms and services to assist clients to grow revenue.

Across all three brands, Jack Henry & Associates generates revenues through several sources, including initial software licensing fees and ongoing annual software maintenance fees, reselling hardware to support the proprietary Jack Henry software, and associated services like installation, training and ongoing support. The company also generates revenues by providing outsourcing services to clients, rather than having the client operate the Jack Henry software and hardware internally. While the company sells products and services internationally, including in Europe, South America and the Caribbean, international revenues are only about 1% of total company revenues.

Jack Henry & Associates is a member of the S&P Mid Cap 400 index and trades under the ticker symbol JKHY.

Jack Henry & Associates’ Dividend and Stock Split History

Jack Henry & Associates began increasing dividends in 1991. It has increased dividends year-over-year (based on calendar years) annually except for in 2003. (Jack Henry & Associates is part of David Fish’s Dividend Contenders list based on the company’s fiscal year dividends.) The company traditionally announces annual dividend increases in mid-February, with the stock going ex-dividend at the end of February.

Jack Henry & Associates has compounded its payout at an average rate of 15.2% over the last 5 years and 17.3% over the last 10 years.

Jack Henry & Associates has split its stock 6 times in the last 25 years. Curiously enough, each split has been in March: 3-for-2 splits in March 1992, March 1993 and March 1997; a 4-for-3 split in March 1994; and 2-for-1 splits in March 2000 and March 2001. A single share purchased prior to the March 1992 would have split into 18 shares by now.

Jack Henry & Associates’ Direct Purchase and Dividend Reinvestment Plans

Jack Henry & Associates has a dividend reinvestment plan, however you need to be a registered shareholder to join the plan. The company does not have a direct purchase plan. If you join the dividend reinvestment plan, you will need to reinvest all your dividends; partial dividend reinvestment is not available under the plan.

The plan’s fee structure is somewhat favorable for investors. When purchasing shares through dividend reinvestment, the company picks up the transaction fee, but you will still pay a brokerage commission of 10 cents per share purchased. When you sell your shares, if you choose to sell under a batch order (in which your shares are grouped with other sell orders and sold at a later date not of your choosing), you’ll pay a transaction fee of $2 plus a commission of 10 cents a share. If you sell your shares under a market order, you’ll pay a transaction fee of $25 plus a commission of 12 cents per share.

Helpful Links

Jack Henry & Associates’ Investor Relations Website

Current quote and financial summary for Jack Henry & Associates (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Jack Henry & Associates