Here's Why You Should Retain FactSet (FDS) in Portfolio Now
FactSet Research Systems Inc. FDS is being aided by solid investor-friendly steps as well as strong global presence.
It has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
FactSet’s fiscal 2023 and 2024 earnings are expected to improve 11.5% and 9.5%, respectively, year over year. Revenues are anticipated to rise 13% and 7.1% in fiscal 2023 and 2024, respectively.
Tailwinds
We are impressed with FactSet’s consistent efforts of rewarding its shareholders in the form of share repurchases and dividend payments. During fiscal 2022, FDS repurchased shares worth $18.64 million and paid dividends of $125.9 million. During fiscal 2021, the company repurchased shares worth $264.7 million and paid dividends of $117.9 million. During fiscal 2020, it repurchased shares worth $199.6 million and paid dividends of $110.4 million. Such moves indicate FDS’ 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.
FactSet is strengthening its global presence, especially in the Asia Pacific region. It has opened an office in Shanghai, China in May 2018 through which it offers data and analytic solutions to an increasing number of investors and investment managers. FactSet has been working with the Chinese investment community since 1996.
The company is witnessing robust growth across its European operations that includes Asia pacific and Europe. Collectively, FactSet earned 36% of revenues from its international operations in fiscal 2022.
Some Risks
FactSet’s third-quarter fiscal 2023 current ratio (a measure of liquidity) of 2.11 was lower than 2.12 reported at the end of third-quarter fiscal 2022. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
Zacks Rank
FactSet currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the broader Zacks Business Services sector are Trane Technologies TT and The Interpublic Group of Companies IPG.
Trane Technologies carries a Zacks Rank #2 (Buy) at present. TT has a long-term earnings growth expectation of 11.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Trane outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6.7%.
Interpublic also holds a Zacks Rank #2. IPG has a long-term earnings growth expectation of 8%.
IPG outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 9.5%.
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Interpublic Group of Companies, Inc. (The) (IPG) : Free Stock Analysis Report
FactSet Research Systems Inc. (FDS) : Free Stock Analysis Report
Trane Technologies plc (TT) : Free Stock Analysis Report
