Shares of ABM Industries Incorporated ABM scaled a 52-week high of $42.22 in the trading session on Jan 13, before closing a tad lower at $41.73.
The company’s shares have gained 19.3% in the past three months, ahead of 3.4% growth of the industry it belongs to.
Let’s find out what’s supporting the uptick.
ABM Industries’ board of directors announced a dividend hike of 2.7%, thereby raising the quarterly cash dividend to 19 cents. The raised dividend will be paid out on Feb 1, 2021, to its shareholders of record as of Jan 7, 2021. This marked the 219th consecutive quarterly cash dividend declared by the company.
The company paid out dividends of $49.3 million in fiscal 2020 and $47.7 million in fiscal 2019. Such shareholder friendly moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business. These initiatives not only instill investors’ confidence but also positively impact the company's earnings per share.
Consecutive Earnings Beat
ABM Industries came up with better-than-expected earnings performance in six of the past seven quarters. The company’s bottom line continued to benefit from higher margin improvement in Work Orders and persistent management of direct labor to align with the operating environment. Continuous operational investments in the company’s EnhancedClean program and re-engaged corporate projects within certain areas like information technology (which were previously paused due to the pandemic) have also been aiding the bottom line.
Strategic Acquisitions Bode Well
ABM Industries' strategy entails growth through strategic acquisitions while maintaining desirable profit margins. The acquisition of GCA Services Group has expanded the company’s long-term operational and financial position. The GCA integration has been completed and is making meaningful contributions to ABM Industries' overall operational results, predominantly within Technology & Manufacturing, Business & Industry and Education segments.
Zacks Rank and Other Stocks to Consider
ABM Industries currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Business Services sector are ManpowerGroup MAN, Huron Consulting HURN and NV5 Global NVEE, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Huron Consulting and NV5 Global is 3.5%, 14% and 16.8%, respectively.
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ManpowerGroup Inc. (MAN) : Free Stock Analysis Report
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