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Here's Why Investors Should Buy ABM Industries (ABM) Now

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·3 min read
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ABM Industries Incorporated ABM has performed well year to date with the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.

Let’s look at the factors that make the stock an attractive bet.

An Outperformer: A glimpse at ABM Industries’ price trend shows that its shares have rallied 23.3% year to date compared with the 2.7% rise of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Solid Rank: ABM Industries currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: One estimate for 2022 has moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2022 earnings has moved 0.3% up in the past 60 days.

Positive Earnings Surprise History: ABM Industries has an impressive surprise history. Earnings of ABM outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average being 11.8%.

Driving Factors: ABM Industries' strategy entails growth through strategic acquisitions and organic investment.  Recently, ABM completed the buyout of Momentum Support. This buyout will expand ABM’s footprint in attractive geographies and end-markets. By acquiring momentum, ABM increases its ability to serve clients in faster growing markets like technology and life sciences, many of whom maintain a significant presence in Ireland. Another acquisition of Able Services, completed in September 2021, strengthens ABM Industries' engineering and technical services, expands its sustainability and energy efficiency offerings and its core businesses and key geographies.

We are also impressed with ABM Industries’ endeavors in rewarding its shareholders through dividend payments and share repurchases. In fiscal 2021, ABM paid out $51 million of dividends but did not repurchase any shares. In fiscal 2020, ABM returned $49.3 million through dividend payments and $5.1 million via share buybacks. In fiscal 2019, ABM returned $47.7 million of dividend payments to its shareholders but did not buy back any shares.  Such moves indicate its commitment to create value for its shareholders and underline its confidence in its business. These initiatives not only raise investors’ optimism but also positively impact a company's earnings per share.

Other Stocks to Consider

Investors interested in the broader Zacks Business Services sector can also consider stocks like Avis Budget Group, Inc. CAR, Cross Country Healthcare CCRN and Automatic Data Processing, Inc. ADP.

Avis Budget sports a Zacks Rank of 1 at present. CAR has a long-term earnings growth expectation of 19.4%.

Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.

Cross Country Healthcare has a Zacks Rank of 1 and a long-term earnings growth expectation of 6.9%.

CCRN delivered a trailing four-quarter earnings surprise of 29.2%, on average.

Automatic Data Processing carries a Zacks Rank of 2, currently. ADP has a long-term earnings growth expectation of 12%.

Automatic Data Processing delivered a trailing four-quarter earnings surprise of 6.2%, on average.  


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