ABM Industries Incorporated (ABM Quick QuoteABM ) is benefiting from 2020 Vision and investor-friendly steps.
ABM’s earnings are anticipated to grow 3.1% and 1.2% in 2022 and 2023, respectively.
Factors That Augur Well
ABM Industries started a comprehensive transformational initiative called 2020 Vision in 2015. This initiative aimed to attain long-term profitable growth through an industry-based go-to-market approach. As part of this initiative, ABM centralized the key functional areas, reinforced its sales capabilities and began investing in service delivery tools and processes to support standard operating practices important for its long-term success. These, in turn, enhanced ABM’s Janitorial, Parking, Facilities Services, Building & Energy Solutions, and Airline Services offerings to strengthen its position as a leading integrated facilities management company.
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 through share buybacks.
In fiscal 2019, ABM Industries returned $47.7 million of dividend payments to its shareholders but did not repurchase any shares. Such moves indicate ABM’s commitment to creating its shareholder value and underline its confidence in its business. These initiatives not only instill investors’ confidence in the stock but also positively impact the earnings per share.
ABM Industries’ current ratio at the end of the July quarter was pegged at 1.21, lower than the current ratio of 1.45 reported at the end of the prior-year quarter. A decreasing current ratio is not desirable as it suggests a company’s inefficiency in serving its short-term debt obligations.
Zacks Rank and Stocks to Consider
ABM Industries currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corporation (BAH Quick QuoteBAH ) , Paychex, Inc. (PAYX Quick QuotePAYX ) and Cross Country Healthcare, Inc. (CCRN Quick QuoteCCRN ) .
Booz Allen carries a Zacks Rank #2 (Buy) at present. BAH has a long-term earnings growth expectation of 7.5%.
Booz Allen delivered a trailing four-quarter earnings surprise of 8.3%, on average.
Paychex carries a Zacks Rank of 2 at present. PAYX has a long-term earnings growth expectation of 7.5%.
Paychex delivered a trailing four-quarter earnings surprise of 8.6%, on average.
Cross Country Healthcare is currently Zacks #2 Ranked. CCRN has a long-term earnings growth expectation of 10%.
CCRN delivered a trailing four-quarter earnings surprise of 26%, on average.