JBHT WACC - Weighted Average Cost of Capital
The WACC of J B Hunt Transport Services Inc (JBHT) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.5% - 9.7% | 8.6% |
| Tax rate | 24.0% - 24.2% | 24.1% |
| Cost of debt | 4.5% - 4.6% | 4.55% |
| WACC | 7.1% - 9.2% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.79 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 9.7% |
| Tax rate | 24.0% | 24.2% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.5% | 4.6% |
| After-tax WACC | 7.1% | 9.2% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JBHT | J B Hunt Transport Services Inc | 0.1 | 0.66 | 0.61 |
| ARCB | ArcBest Corp | 0.12 | 1.28 | 1.17 |
| KNX | Knight-Swift Transportation Holdings Inc | 0.33 | 1.1 | 0.88 |
| LSTR | Landstar System Inc | 0.03 | 0.67 | 0.65 |
| ODFL | Old Dominion Freight Line Inc | 0 | 0.98 | 0.98 |
| SAIA | Saia Inc | 0.03 | 0.79 | 0.77 |
| SNDR | Schneider National Inc | 0.12 | 0.63 | 0.58 |
| TFII.TO | TFI International Inc | 0.39 | 0.95 | 0.73 |
| WERN | Werner Enterprises Inc | 0.38 | 0.66 | 0.51 |
| YELL | Yellow Corp | 15.91 | -1.02 | -0.08 |
| Low | High | |
| Unlevered beta | 0.64 | 0.75 |
| Relevered beta | 0.69 | 0.81 |
| Adjusted relevered beta | 0.79 | 0.87 |
JBHT's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for JBHT:
cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.