MAXIMUS, Inc.
MMS
has an impressive
Growth Score
of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth. For both fiscal 2022 and 2023, revenues are expected to grow at a rate of 4.9% on a year-over-year basis.
The stock has rallied 10.3% in the past year compared with 3.3% growth of the
industry
it belongs to.
Image Source: Zacks Investment Research
What’s Driving the Stock?
MAXIMUS has been active undertaking acquisitions to expand its business processes, knowledge and client relationships, enhance technical capabilities and gain additional skill sets. These acquisitions also complement the company’s long-term organic growth strategy. On Mar 1, 2021, MMS completed the purchase of the Federal division of Attain. This buyout is expected to strengthen two core pillars of Maximus’s long-term corporate strategy, including accelerating digital transformation and the ongoing expansion into the U.S. federal market. Some other buyouts include InjuryNet Australia Pty Limited and Index Root Korea Co.
MMS has a solid track record of dividend payments. During fiscal 2020 and 2019, MAXIMUS paid cash dividends of $70.2 million and $63.9 million, respectively. The company paid out $11.7 million dividends to shareholders during each of the fiscal years 2018, 2017 and 2016. Such moves indicate its commitment to create value for shareholders and underline its confidence in its business.
Debt Woes Persist
MAXIMUS’ cash and cash equivalent balance of $135 million at the end of the fourth-quarter fiscal 2021 was well below the long-term debt level of $1.43 billion, underscoring that the company doesn’t have enough cash to meet this debt burden. The cash level, however, can meet the short-term debt of $81 million.
Zacks Rank & Stocks to Consider
MAXIMUS carries a Zacks #3 (Hold) Rank. 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
Avis Budget
CAR
, Cross Country Healthcare, Inc.
CCRN
and CRA International, Inc.
CRAI
.
Avis Budget has an expected earnings growth rate of around 453.5% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 453.8% so far this year. It has a long-term earnings growth of 18.8%. CAR sports a Zacks #1 Rank.
Cross Country Healthcare has an expected earnings growth rate of around 500% for the current fiscal year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.
Cross Country Healthcare’s shares have surged 218.1% so far this year. It has a long-term earnings growth of 21.5%. CCRN sports a Zacks #1 Rank.
CRA International has an expected earnings growth rate of around 61.2% for the current year. It has a trailing four-quarter earnings surprise of 51%, on average.
CRA International’s shares have surged 85.3% so far this year. It has a long-term earnings growth of 15.5%. CRAI carries a Zacks #2 (Buy) Rank.
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