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ManpowerGroup Inc. (MAN - Analyst Report), a leading provider of workforce solutions, is a promising option for investors seeking both growth and income. The company yesterday announced a dividend hike, which reflects its strong cash flow generation capability.

Milwaukee, Wisconsin-based ManpowerGroup hiked its semi-annual dividend by 7% to 49 cents per share. The dividend which is due on June 16, 2014 will be paid to stockholders of record as on June 2, 2014.

We believe that its continuous dividend payments and increments reflect the growth potential of its earnings and cash flow generation capabilities. The company shelled out $72 million in dividends in 2013.

Dividend hike is quiet frequent among companies with stable cash position. This seems to be the case for ManpowerGroup as the company ended the first quarter with cash and cash equivalents of $696.5 million.

Dividend hikes not only enhance shareholder’s return but raise the market value of the stock. Through this strategy, the companies bolster investors’ confidence on the stock, thereby persuading them to either buy or hold the scrip instead of selling them. Looking ahead, ManpowerGroup remains confident of its growth potential, suggesting enhanced value for shareholders.

Currently, ManpowerGroup carries a Zacks Rank #1 (Strong Buy), reflecting its positive earnings surprise streak. The company has beaten the Zacks Consensus Estimate by an average of 19.9% in the trailing four quarters. In the recently concluded quarter, the company posted earnings per share of 86 cents, which handily beat the Zacks Consensus Estimate of 67 cents and increased substantially year over year.

Some other better ranked stocks in the same sector include Robert Half International Inc. (RHI - Analyst Report), CTPartners Executive Search Inc. (CTP - Snapshot Report) Korn/Ferry International (KFY - Snapshot Report). All these carry a Zacks Rank #2 (Buy).

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