sector, despite the coronavirus-induced market uncertainty, has been steadily gaining steam on the back of gradual resumption of business activities, increased adoption and success of the work-from-home model, rise in demand for risk mitigation and consulting services, and expertise in improving operational efficiency and reducing costs. Providers of essential and non-deferrable services, such as waste removal and building maintenance, remained resilient to the pandemic-induced disruptions. Business Services
Because of its widely-diversified nature, the sector seeks to benefit from the growth of the overall economy, which is expected to strengthen further on success of the ongoing mass vaccination program, continued government response in the form of pandemic-relief packages and expanded unemployment benefits.
Meanwhile, a steady recovery is evident from the latest first-quarter 2021 GDP number, which according to the "second" estimate released by the Bureau of Economic Analysis, increased at an annual rate of 6.4%, higher than 4.3% growth witnessed in the fourth quarter of 2020.
In view of the aforementioned favorable trends, several firms have chosen to reward their shareholders with dividend hikes. We believe consistency in rewarding shareholders through dividend payments or share repurchases not only boost investor confidence but also positively impact the company’s earnings per share.
3 Companies That Rewarded Shareholders TransUnion (: This Zacks Rank #2 (Buy) company increased its quarterly dividend rate by almost 27%, from 7.5 cents per share to 9.5 cents per share. The increased dividend will be paid out on Jun 10, 2021 to shareholders of record at the close of business on May 26. TRU Quick Quote TRU - Free Report)
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This Illinois-based company provides risk and information solutions. Despite the COVID-19 uncertainties, the company witnessed improvement across most U.S. verticals, especially in Financial Services and Emerging Verticals. Internationally, growth was backed by improving macro trends. Further, the company’s business model ensures highly recurring and diversified revenue streams, significant operating leverage, low capital requirements and stable cash flows. Acquisitions act as a growth catalyst, helping the company expand international footprint.
Additionally, it has raised its guidance for 2021. Revenues are now expected to be between $2.949 billion and $2.992 billion compared with the prior guidance of $2.817-$2.877 billion. The Zacks Consensus Estimate of $2.97 billion lies within the updated guidance. Adjusted earnings are now expected between $3.45 and $3.58 per share compared with the prior guidance of $3.16-$3.31. The Zacks Consensus Estimate of $3.55 lies within the updated guidance. Adjusted EBITDA is now anticipated to be between $1.157 billion and $1.189 billion compared with the prior guidance of $1.083-$1.121 billion.
The Zacks Consensus Estimate for the company’s 2021 EPS has moved up 7.3% in the past 90 days. The company’s expected earnings growth rate for the year is 18.3%. Additionally, it has a long-term (three to five years) expected earnings growth rate of 20.9%. The company has a trailing four-quarter earnings surprise of 14.1%, on average. The stock has rallied 7.9% year to date.
Insperity, Inc. (: This Texas-based Zacks Rank #3 (Hold) company yesterday announced a dividend hike of 12.5%, thereby raising its quarterly cash dividend to 45 cents per share from 40 cents. The raised dividend will be paid out on Jun 24, 2021 to shareholders of record on Jun 10, 2021. NSP Quick Quote NSP - Free Report)
The company provides human resources and business solutions to improve business performance for small and medium-sized businesses.
Increase in average number of worksite employees paid per month has been aiding the company’s top line. Strength across sales, client retention and growth in the client base have also acted as other tailwinds. Further, Insperity raised its guidance for 2021.Adjusted earnings are now expected in the band of $3.83-$4.40 per share compared with the prior guidance of $3.27-$4.20. The Zacks Consensus Estimate of $3.95 lies within the updated guidance. Adjusted EBITDA is now anticipated in the range of $250-$280 million compared with the prior guidance of $225-$275 million. Average WSEEs are expected in the range of 243,600-248,300 compared with the prior guidance of 238,900-248,300.
The Zacks Consensus Estimate for the company’s 2021 EPS has moved up 5.6% in the past 90 days. It has a long-term (three to five years) expected earnings growth rate of 15%. The company has a trailing four-quarter earnings surprise of 54.7%, on average. The stock has rallied 13.3% year to date.
Omnicom Group Inc.( OMC Quick Quote OMC - Free Report) : This New York-based Zacks Rank #3 company recently announced a dividend hike of 7.7%, thereby raising its quarterly cash dividend to 70 cents per share from 65 cents.
It together with its subsidiaries provides advertising, marketing, and corporate communications services.
The company’s diversity of operations and increased focus on delivering consumer-centric strategic business solutions ensure consistent profits. The company’s bottom line is gaining from ongoing operating efficiency initiatives in real estate, back office services, procurement and IT areas. Change in business mix resulting from offloading of some non-core or underperforming agencies over the past year has also aided the bottom line.
The Zacks Consensus Estimate for the company’s 2021 EPS has moved up 4.2% in the past 90 days. The company’s expected earnings growth rate for the year is 22.6%. It has a long-term (three to five years) expected earnings growth rate of 9.6%. The company has a trailing four-quarter earnings surprise of 12.5%, on average. The stock has rallied 31.9% year to date.
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