Measures favorable to investors MAXIMUS (MMS), high debt
Maximus, Inc. MMS shares have appreciated 7.4% over the past year against a 1.5% increase in industry it belongs to. The company is currently benefiting from shareholder-friendly measures and strategic acquisitions.
Image source: Zacks Investment Research
The company posted better-than-expected results for the fourth quarter of fiscal 2021. Earnings per share (excluding 25 cents from non-recurring items) was $ 1.08, exceeding by Zacks’ consensus estimate was 21.4% and was up 5.9% year over year. Revenue of $ 1.1 billion exceeded the consensus mark of 2.1% and increased 19.7% year-over-year.
The company has an impressive history of dividend payments. In fiscal 2020 and 2019, MAXIMUS paid cash dividends of $ 70.2 million and $ 63.9 million, respectively. It paid $ 11.7 million in dividends to its shareholders in each of fiscal years 2018, 2017 and 2016. These measures reflect MAXIMUS ‘commitment to increasing shareholder value and underscore its confidence in the company.
MAXIMUS is active on the acquisition front to extend its business processes, knowledge and customer relationships, improve its technical capabilities and acquire additional skills. Strategic acquisitions also complement the company’s long-term organic growth strategy. On June 1, MAXIMUS finalized the acquisition of Veterans Evaluation Services. The acquisition will create an opportunity for Maximus to develop the independent clinical evaluation business of Veterans Evaluation Services at the federal level, while expanding its presence within the United States Department of Veterans Affairs. On March 1, the company completed the purchase of the federal division of Attain. In 2020, MAXIMUS made two acquisitions: InjuryNet Australia Pty Limited and Index Root Korea Co. Ltd.
MAXIMUS ‘cash and cash equivalents balance of $ 135 million at the end of the fourth quarter of fiscal 2021 was well below the long-term debt level of $ 1.43 billion, noting that the company does not have sufficient liquidity to cope with this debt burden. Nonetheless, the cash level can cover the short-term debt of $ 81 million.
Zacks ranking and actions to take into account
Maximus currently wears a Zacks Rank # 3 (Hold). You can see The full list of today’s Zacks # 1 (strong buy) stocks here.
Some stocks better ranked in the Zacks at large Business services sector are Avis Budget CAR, Cross Country Healthcare, Inc. CCRN and CRA International, Inc. CRAI.
Budget Notice has an expected earnings growth rate of approximately 398.1% for the current year. CAR has a surprise profit over the last four quarters of 76.9%, on average.
Avis Budget shares have jumped 673.8% since the start of the year. CAR shows long-term earnings growth of 27.5%. CAR has a Zacks # 1 rank.
Cross Country Health Care has an expected earnings growth rate of approximately 397.8% for the current fiscal year. CCRN has a surprise revenue of the last four quarters of 75%, on average.
Shares of Cross Country Healthcare have jumped 236.9% so far this year. CCRN shows long-term profit growth of 21.5%. CCRN has a Zacks # 1 rank.
CRA International has an expected earnings growth rate of around 61.2% for the current year. CRA International has a surprise earnings for the last four quarters of 51%, on average.
CRA International shares have jumped 135.7% so far this year. CRA International shows long-term profit growth of 15.5%. FDS has a Zacks # 2 (Buy) rank.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.