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Reasons to Hold ABM Industries (ABM) in Your Portfolio
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ABM Industries'(ABM - Free Report) success can be attributed to its strategic initiative, 2020 Vision, which has played a pivotal role in achieving sustainable and profitable long-term growth by adopting an industry-focused go-to-market approach. Rising wages and a competitive talent market are causes of concern for the company.
ABM has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors That Bode Well
In 2015, ABM embarked on a transformative journey named "2020 Vision" with the objective of achieving sustainable and profitable growth through an industry-focused go-to-market strategy. As part of this initiative, the company centralized crucial functional areas, bolstered its sales capabilities and made strategic investments in service delivery tools and processes to support essential operating practices for its long-term success. These efforts have, in turn, elevated the quality of ABM's Janitorial, Parking, Facilities Services, Building & Energy Solutions, and Airline Services, thus solidifying its position as a leading integrated facilities management company.
ABM Industries pursues growth through a combined strategy of strategic acquisitions and organic investment. The company's long-term strategic plan, ELEVATE, is designed to enhance client offerings, improve transparency and efficiency, develop in-house talent management capabilities and modernize the digital ecosystem. ELEVATE is anticipated to significantly drive ABM Industries' organic growth, fortify its strategic positioning and bolster profitability.
We find ABM Industries' commitment to shareholder rewards commendable, particularly through dividend payments and share repurchases. In fiscal years 2022, 2021 and 2020, the company distributed dividends amounting to $51.9 million, $51 million and $49.3 million, respectively. Additionally, it allocated $9.8 million and $5.1 million to share repurchases in 2022 and 2020, respectively, while abstaining from such actions in 2021. These financial moves reflect the company's dedication to creating value for shareholders and underscore its confidence in the strength of its business.
Some Risks
ABM Industries' current ratio at the end of third-quarter was pegged at 1.47, lower than the current ratio of 1.53 reported at the end of the prior quarter. Decreasing current ratio does not bode well for the company.
In 2022, the company faced challenges with labor shortages, rising wage inflation and intensified competition in the job market. Persistence of these issues could result in higher costs, including increased spending on overtime and a greater reliance on temporary staff to meet customer demands. Additionally, attracting and retaining employees may require offering higher wage rates.
ABM currently holds a Zacks Rank #3 (Hold).
Stocks to Consider
Here are a few better-ranked stocks from the Business Services sector that may be considered:
DocuSign (DOCU - Free Report) :TheZacks Consensus Estimate of DocuSign’s 2023 revenues indicates 8.6% growth from the year-ago figure while earnings are expected to grow by 29.1%. The company has beaten the consensus estimate in all four quarters, with an average surprise of 27.1%.
Broadridge Financial Solutions (BR - Free Report) :TheZacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure while earnings are expected to grow by 10.1%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, with an average surprise of 5.4%.
BR holds a Zacks Rank of 2.
Fiserv (FI - Free Report) :The Zacks Consensus Estimate of Fiserv’s 2023 revenues indicates 8.1% growth from the year-ago figure while earnings are expected to grow by 15.4%. The company has beaten the consensus estimate in two of the past four quarters while matching in the other two instances, the average surprise being 0.6%.
The company holds a Zacks Rank #2.
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Reasons to Hold ABM Industries (ABM) in Your Portfolio
ABM Industries'(ABM - Free Report) success can be attributed to its strategic initiative, 2020 Vision, which has played a pivotal role in achieving sustainable and profitable long-term growth by adopting an industry-focused go-to-market approach. Rising wages and a competitive talent market are causes of concern for the company.
ABM has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors That Bode Well
In 2015, ABM embarked on a transformative journey named "2020 Vision" with the objective of achieving sustainable and profitable growth through an industry-focused go-to-market strategy. As part of this initiative, the company centralized crucial functional areas, bolstered its sales capabilities and made strategic investments in service delivery tools and processes to support essential operating practices for its long-term success. These efforts have, in turn, elevated the quality of ABM's Janitorial, Parking, Facilities Services, Building & Energy Solutions, and Airline Services, thus solidifying its position as a leading integrated facilities management company.
ABM Industries pursues growth through a combined strategy of strategic acquisitions and organic investment. The company's long-term strategic plan, ELEVATE, is designed to enhance client offerings, improve transparency and efficiency, develop in-house talent management capabilities and modernize the digital ecosystem. ELEVATE is anticipated to significantly drive ABM Industries' organic growth, fortify its strategic positioning and bolster profitability.
ABM Industries Incorporated Revenue (TTM)
ABM Industries Incorporated revenue-ttm | ABM Industries Incorporated Quote
We find ABM Industries' commitment to shareholder rewards commendable, particularly through dividend payments and share repurchases. In fiscal years 2022, 2021 and 2020, the company distributed dividends amounting to $51.9 million, $51 million and $49.3 million, respectively. Additionally, it allocated $9.8 million and $5.1 million to share repurchases in 2022 and 2020, respectively, while abstaining from such actions in 2021. These financial moves reflect the company's dedication to creating value for shareholders and underscore its confidence in the strength of its business.
Some Risks
ABM Industries' current ratio at the end of third-quarter was pegged at 1.47, lower than the current ratio of 1.53 reported at the end of the prior quarter. Decreasing current ratio does not bode well for the company.
In 2022, the company faced challenges with labor shortages, rising wage inflation and intensified competition in the job market. Persistence of these issues could result in higher costs, including increased spending on overtime and a greater reliance on temporary staff to meet customer demands. Additionally, attracting and retaining employees may require offering higher wage rates.
ABM currently holds a Zacks Rank #3 (Hold).
Stocks to Consider
Here are a few better-ranked stocks from the Business Services sector that may be considered:
DocuSign (DOCU - Free Report) :TheZacks Consensus Estimate of DocuSign’s 2023 revenues indicates 8.6% growth from the year-ago figure while earnings are expected to grow by 29.1%. The company has beaten the consensus estimate in all four quarters, with an average surprise of 27.1%.
The company holds a Zacks Rank of 2 (Buy) and has a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Broadridge Financial Solutions (BR - Free Report) :TheZacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure while earnings are expected to grow by 10.1%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, with an average surprise of 5.4%.
BR holds a Zacks Rank of 2.
Fiserv (FI - Free Report) :The Zacks Consensus Estimate of Fiserv’s 2023 revenues indicates 8.1% growth from the year-ago figure while earnings are expected to grow by 15.4%. The company has beaten the consensus estimate in two of the past four quarters while matching in the other two instances, the average surprise being 0.6%.
The company holds a Zacks Rank #2.