Reasons to Hold FactSet (FDS) Stock in Your Portfolio Now
FactSet Research Systems Inc. FDS has had an impressive run over the past three months. The stock has gained 9.3% compared with the 0.9% rise of the industry it belongs to and the 0.9% rally of the Zacks S&P 500 composite.
FactSet’s fiscal 2024 and 2025 earnings are expected to improve 10.7% and 11.3%, respectively, year over year. Revenues are anticipated to rise 7.6% and 7% in fiscal 2023 and 2024, respectively.
FactSet Research Systems Inc. Price
FactSet Research Systems Inc. price | FactSet Research Systems Inc. Quote
Factors That Augur Well
FactSet has been engaged for more than 40 years in delivering extensive data, sophisticated analytics and flexible technology to global financial professionals, and is currently benefiting from a growing customer base and strong global presence. The company added 151 clients in the fourth quarter of fiscal 2023, driven by an increase in corporate and wealth clients, taking the total client count to 7,921. The annual client retention rate was 91%. FactSet’s Organic Annual Subscription Value plus professional services were up 7.2% year over year.
The recent acquisition of idaciti supports FactSet’s ongoing initiative to digitally revamp its content collection infrastructure, while also expediting the availability of essential data sets that underpin advanced future workflows. The 2022 acquisition of CUSIP Global Services has strengthened the company’s position in the global capital markets.
FactSet has a consistent track record of rewarding its shareholders through share repurchases and dividends. During fiscal 2022, the company repurchased shares worth $18.64 million and paid a dividend of $125.9 million. During fiscal 2021 and 2020, FactSet repurchased shares worth $264.7 million and $199.6 million, and paid dividends of $117.9 million and $110.4 million, respectively. Such moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business. They not only instill investors’ confidence but also positively impact earnings and share price.
Some Risks
FactSet’s fourth-quarter fiscal 2023 current ratio (a measure of liquidity) stood at 1.61, lower than the prior quarter’s 2.11 and the year-ago quarter’s 1.99. A decline in the current ratio does not bode well.
Zacks Rank and Stocks to Consider
FactSet currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the broader Business Service sector that investors may consider:
Verisk Analytics VRSK beat the Zacks Consensus Estimate in three of the four previous quarters and matched once, with an average surprise of 9.9%. The consensus mark for 2023 revenues is pegged at $2.66 billion, indicating an 8.2% decrease from the year-ago reported figure. Its earnings are pegged at $5.71 per share for 2023, suggesting 14% growth from the year-ago reported figure. VRSK currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Automatic Data ADP currently has a Zacks Rank of 2. The company beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 3.1%. The consensus estimate for fiscal 2023 revenues and earnings implies year-over-year growth of 6.3% and 11.1%, respectively.
Broadridge BR currently carries a Zacks Rank of 2. It beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched on one instance, the average surprise being 0.5%. The consensus estimate for fiscal 2024 revenues and earnings suggests a rise of 7.2% and 8.8% year over year, respectively.
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Broadridge Financial Solutions, Inc. (BR) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
FactSet Research Systems Inc. (FDS) : Free Stock Analysis Report
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
