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ManpowerGroup Inc.’s MAN shares have charted a solid trajectory in the recent times, appreciating a massive 70.8% over the past year, ahead of the Zacks S&P 500 composite’s rally of 50.9%.
The company has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of quality and sustainability of its growth.
ManpowerGroup has an expected long-term earnings per share (three to five years) growth rate of 21.7%. Its earnings are expected to increase 49.6% in 2021 and 39.1% in 2022, year over year.
Factors That Bode Well
ManpowerGroup is trying to mitigate its ongoing revenue softness through strong pricing discipline and cost control. The company’s Managed Service Provider business has remained resilient despite the coronavirus crisis, and witnessed growth in 2020 as it assisted more clients in building customized workforce solutions during the economic depression.
In a bid to increase productivity and efficiency, the company is making significant investments in technology. It is implementing front office systems, cloud-based and mobile applications, and making enhancements to its global technology infrastructure across several markets.
ManpowerGroup's cash and cash equivalent balance of $1.57 billion at the end of fourth-quarter 2020 was well above the long-term debt level $1.12 billion, underscoring that the company has enough cash to meet its debt burden. A strong cash position enables the company to pursue strategic acquisitions, invest in growth initiatives and return cash through regular quarterly dividend payment and share repurchases.
Zacks Rank and Stocks to Consider
ManpowerGroup currently carries a Zacks Rank #3 (Hold).
Some better-ranked service stocks are ExlService EXLS, Gartner IT) and Blucora BCOR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected earnings per share (three to five years) growth rate for ExlService, Gartner and Blucora is pegged at 9.4%, 13.5% and 15%, respectively.
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