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Thursday, 06/10/2004

Forecasting A Return of Sixty Percent
By Nich Sheldon
JH - John H Harland

Company Description

Atlanta-based John H. Harland Company (NYSE:JH - News) ( is listed on the New York Stock Exchange under the symbol ``JH.'' Harland is a leading provider of software and printed products to the financial institution market. Harland's software solutions include, deposit & loan origination, platform, teller, call-center, mortgage, business intelligence, core systems, and customer relationship management systems. Harland's printed products offerings include checks, direct marketing and financial forms. Scantron Corporation (, a wholly owned subsidiary, is a leading provider of software services and systems for the collection, management and interpretation of data to the financial, commercial and educational markets.

[Source: Company Press Release]

Reasons to Invest:

John H Harland (NYSE:JH) is this week's Drip of the Week. Shares of JH had sunk 16 points from May of 2002 to November of 2002 before forming a bottom. Once that bottom was formed (approximately in the 18 range), the stock has never looked back.

I am upbeat about their dividend offering, as well as their point and figure chart, which notes a bullish price objective of 50.50 - more than 60% higher than it's current trading range of 30.

On May 7th, John H Harland announced that they had been chosen to supply their Harland Financial Solutions' Encore! to standardize and add functionality to Banknorth N.A.'s branch operations.

On April 30th the company completed their acquisition of Electronic Mortgage Document Product Line from Greatland Corporation, based out of Michigan. This acquisition gives JH over 2,400 state and federal compliant lending forms, which should serve to help them land more mortgage based business.

The company raised their fiscal 2004 earnings (April 20th) to $1.94 - $1.99 - including an estimated $0.19 per share of exit costs and severance charges - citing a strong first quarter as their primary backing for this guidance increase.

John H Harland's Board of Directors announced on the 23rd of April that they had approved their quarterly dividend of $0.10 per share for the quarter. The annual dividend of $0.40 per share tallies out to a 1.30 percent dividend yield. Over the next year JH is expecting a 16.67 percent dividend growth rate.

I drew a May 03 regression channel on JH's chart and was intrigued to see that the stock has only closed below this channel twice, only to rebound in the following trading session.

Currently the stock is about to retest the middle bar of its regression channel (approximately 50 cents away on the daily chart). The MACD indicator is giving off a bullish signal and has done so since the stock fell out its channel in the middle of last month. The weekly MACD indicator is showing signs of a bullish crossover, which could occur late next week. The stochastics indicator is in neutral territory on the weekly chart. This is generally an indication that the stock has room to move higher. When a given stock is in overbought territory it could mean that traders may use this information as a chance to take profits, while waiting for the stock to travel back into neutral territory.

Another positive sign on the stock is the fact that the 20-DMA is about to crossover the simple 10-DMA, which is usually a sign of bullish things to come.

As mentioned before JH has a PnF price objective of 50.50, which is $19.72 higher (or 64%) than today's close of $30.78. I would be happy to see the stock break over the 45.00 range, but dividend investors should be aware that we may see some of the 2002 highs holding up as resistance. However, if we could get a close over 35.00 there is no telling where the proverbial glass ceiling is, and how far the profit train will travel.

This ends another exciting episode of the Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the limelight.

Until Next Week,
Nich Sheldon

Broker Recommendations

Strong Buy         2
Buy                0
Hold               2
Sell               0
Strong Sell        0

Brokers Covering   4

DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes

Min/Max Investment = $50-$250,000/year

Reinvestment Fees - 
Dividend investment fees: $0.00
Cash investment fees: $5.00 +$0.03 per share
Auto reinvestment fees: $2.00 + Commission

Transfer Agent:
First Chicago Trust

Corporate Headquarters:
2939 Miller Road
Decatur, GA 30035
Phone: (770) 981-9460


Copyright 2003

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