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5 Consulting Services Stocks to Add to Portfolio in 2019

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This year has had a mixed run surrounded by the impact of the U.S. Tax Cuts and Jobs Act, federal interest rate hikes and the trade war debacle.

While the Trump administration’s move for a massive corporate tax cut earlier this year was a breather for the U.S. stock market, global trade tensions acted as a major headwind.

Though the three interest rate hikes this year by the Fed indicate inherent economic stability, investors remain apprehensive about the Dec 18-19 meeting, wherein a fourth hike is expected to be declared. Another increase in rates might induce more volatility in the market.

The Business Services sector has been in good shape through 2018 on the back of a strong economy, tax reform, higher government and corporate spending and a strong labor market. It has grown decently despite trade war tensions and stock market volatility.

The consulting services industry, which is part of the broader business services sector, has also performed well this year.

Consulting Services Scenario So Far in 2018

The consulting services industry has been doing well on the back of the broader U.S. economy. This is because the industry is firmly tied to the manufacturing and non-manufacturing activities that are gaining from strength in the U.S. economy.

Post the 2017 tax reform, corporate spending has increased significantly with U.S. companies pouring tax savings into growth initiatives. This has been spurring demand for consulting services.

So far this year, the Zacks Consulting Services  Industry has rallied 1.1% compared with the 4.8% decline of the Zacks S&P 500 composite.

 

Will the Momentum Continue in 2019?

The industry has been growing steadily over the past several years with the United States and Europe serving as the largest markets for consulting services. Global players are increasingly trying to expand into other industrialized regions and growing economies.

Per a report by statista, the global consulting market is expected to generate $272 billion revenues in 2018, $285 billion in 2019 and $296 billion in 2020, indicating a considerable upward trend in the industry’s growth rate.

However, higher talent costs due to a competitive talent market coupled with Trump’s stringent policies on immigration are likely to remain headwinds for the industry. The industry being labor intensive is heavily dependent on foreign talent.

Despite the challenges, the factors that drove the consulting services industry in 2018, including strong economy, reduced tax rates, robust manufacturing and non-manufacturing activity, and higher corporate spending are expected to remain in place in 2019 as well.

The Zacks consulting services industry currently carries a Zacks Industry Rank #63, which places it in the top 25% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term growth prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

Five Consulting Services Stocks to Invest in 2019

With the help of the Zacks Stock Screener, we have zeroed in on five promising stocks from the consulting services industry, which have a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy) and has had an impressive run on the bourse on a year-to-date basis. These stocks also have a solid expected earnings growth rate for 2019 and have witnessed upward earnings estimate revisions in the past 60 days.

You can see the complete list of today’s Zacks #1 Rank stocks here.

FTI Consulting, Inc. (FCN - Free Report) is a provider of business advisory services. Shares of the company have gained 40.2% year to date. Currently, it sports a Zacks Rank #1 and has a market capitalization of $2.35 billion.

 

The company’s expected earnings growth rate for 2019 is 0.5%. The Zacks Consensus Estimate for 2019 has improved 12.9% in the past 60 days.

Exponent, Inc. (EXPO - Free Report) operates as a science and engineering consulting company globally. Shares of the company have risen 37.3% year to date. Currently, it sports a Zacks Rank #2 and has a market capitalization of $2.59 billion.

 

The company’s expected earnings growth rate for 2019 is 6.4%. The Zacks Consensus Estimate for 2019 has improved 1.4% in the past 60 days.

Huron Consulting Group Inc. (HURN - Free Report) is a professional services firm, which provides advisory, technology and analytic solutions. Shares of the company have gained 23.3% year to date. Currently, it carries a Zacks Rank #2 and has a market capitalization of $1.15 billion.

 

The company’s expected earnings growth rate for 2019 is 13.6%. The Zacks Consensus Estimate for 2019 has improved 0.8% in the past 60 days.

Navigant Consulting, Inc. is a provider of professional services to corporate executives and senior management, corporate counsel, law firms, corporate boards, special committees and governmental agencies. Shares of the company have climbed 17.2% year to date. Currently, it carries a Zacks Rank #2 and has a market capitalization of $988.92 million.

 

The company’s expected earnings growth rate for 2019 is more than 100%. The Zacks Consensus Estimate for 2019 has improved 2.2% in the past 60 days.

Cynergistek, Inc. is a provider of outsourced document solutions, IT consulting data security and managed print services. Shares of the company have climbed 17.1% year to date. Currently, it carries a Zacks Rank #2 and has a market capitalization of $45.96 million.

 

The company’s expected earnings growth rate for 2019 is 21.7%. The Zacks Consensus Estimate for 2019 has improved 3.2% in the past 60 days.

In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?

These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


FTI Consulting, Inc. (FCN) - free report >>

Huron Consulting Group Inc. (HURN) - free report >>

Exponent, Inc. (EXPO) - free report >>

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