Maximus, Inc. MMS shares have had an impressive run over the past year. The stock has rallied 32.2% compared with the 22.9% rise of the industry it belongs to and the 11.6% increase of the Zacks S&P 500 composite.
What’s Behind the Rally
Maximus is a leading operator of government health and human services programs globally. The company maintains solid relationships and a strong reputation with governments and long-term contracts provide it with a steady flow of revenues. Moreover, increased longevity and more complex health needs have increased the need for government social benefits and safety-net programs. This is likely to continue driving demand for its services.
Maximus, Inc. Price
Maximus, Inc. price | Maximus, Inc. Quote
The company has a solid track record of dividend payments. During fiscal 2022, 2021 and 2020, Maximus paid cash dividends of $68.7 million, $68.8 million and $70.2 million, respectively. Such moves indicate the company's commitment to creating value for shareholders and underline its confidence in its business.
Maximus has been active on the acquisition front to expand its business processes, knowledge and client relationships, enhance technical capabilities and gain additional skill sets. Strategic acquisitions also complement the company’s long-term organic growth strategy. The 2022 acquisition of Stirling Institute of Australia has strengthened its employment services. Another acquisition, BZ Bodies, has strengthened Maximus’ services within the U.K. Both businesses are within its Outside the U.S. segment.
Maximus' current ratio (a measure of liquidity) at the end of third-quarter fiscal 2023 was pegged at 1.46, higher than the prior quarter’s 1.4. A current ratio of more than 1 indicates that the company should not have problems meeting its short-term obligations.
Zacks Rank and Stocks to Consider
Maximus currently carries a Zacks Rank #3 (Hold).
Here are a few better-ranked stocks from the broader Business Service sector that warrant a look
DocuSign DOCU beat the Zacks Consensus Estimate in all the four trailing quarters, with an earnings surprise of 25.6%. The current consensus estimate for revenues indicates an 8.1% increase from the year-ago figure. The consensus mark for earnings is pegged at $2.52 per share, indicating 24.1% year-over-year growth. DOCU currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ABM Industries ABM beat the Zacks Consensus Estimate in three of the four trailing quarters and matched on one instance, the average surprise being 2.64%. The Zacks Consensus Estimate for fiscal 2023 revenues is pegged at $8.08 billion, 3.5% higher than the year ago reported figure. The consensus estimate for bottom line is pegged at $3.51, indicating a 4.1% year-over-year decline. ABM carries Zacks Rank #2 (Buy).
Accenture ACN currently carries a Zacks Rank #2. The Zacks Consensus Estimate for fiscal 2023 revenues is pegged at $64.18 billion, 4.2% higher than the year-ago reported figure. The consensus estimate for ACN’s bottom line is pegged at $11.59, indicating 4.2% year-over-year growth. It beat the Zacks Consensus Estimate in all the four trailing quarters, with an average of 5.7%.
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