About: Jack Henry is a leading provider of core banking software to mid-sized credit unions and banks in the United States. Core banking software is used to support a bank’s most common transaction, such as processing deposits and withdrawals, calculating interest, making and servicing loans and opening new accounts. Jack Henry sells many other software applications, such as for disaster recovery, mobile and online banking, cybersecurity and payment processing.

Why it’s in the portfolio:

Fundamentals: JKHY has a market cap of $11b USD, a PE of 40.9x forward earnings, EPS of 3.7x forward earnings and a PEG ratio of around 3.4. The company currently has a 1.1% dividend yield and a 43.7% payout ratio. The company’s debt to assets are currently 0.0% and debt to equity is 0.0%.

What could go wrong?