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Charles River (CRAI) Stock Up 106% Year to Date: Here's Why

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Shares of Charles River Associates (CRAI - Free Report) have returned 106% so far this year, outperforming the 42.3% growth of the industry it belongs to in the said time frame.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s delve into factors that have contributed to the company’s price performance:

Dividend Hike

Charles River’s board of directors has increased its quarterly dividend rate by 19.2%, from 26 cents per share to 31 cents per share. The increased dividend will be paid out on Dec 10, 2021 to shareholders of record at the close of business on Nov 30.

The company has a consistent record of returning value to shareholders in the form of dividend and share repurchases. In 2020, 2019 and 2018, the company repurchased shares worth $13.4 million, $18.1 million and $27.9 million, respectively. It paid $7.39 million, $6.54 million and $5.78 million in dividends during 2020, 2019 and 2018, respectively. Such moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business. These initiatives not only instill investors’ confidence on the stock, but also positively impact earnings per share.

Consecutive Earnings & Revenue Beat

Charles River reported better-than-expected earnings and revenue performance in four of the last five quarters. While improvement in operational performance has been aiding the company’s bottom line, strength across the company’s Antitrust & Competition Economics, Auctions & Competitive Bidding, Energy, Financial Economics, Intellectual Property, Labor & Employment, Marakon, and Risk, Investigations & Analytics practices benefited the top line.

Solid International Presence

Charles River operates through a global network of coordinated offices spread across North America and Europe. The company’s international presence provides it the opportunity to work with the world’s leading professionals on multiple issues. This helps the company enhance its knowledge base and areas of functional expertise. The majority of the company’s clients are multinational firms facing complicated issues. We believe that Charles River’s international operations help expand its geographic footprint and contribute significantly to the top line.

Diversified Business Model

Charles River has a diversified business with service offerings across areas of functional expertise, client base and geographical regions. Being proficient in multiple industries helps the company meet varying client needs and offer other innovative services. Further, the company gets to know about business strategies adopted across the world. This multidisciplinary set up enables it to bring experts from numerous fields under one platform. The diversification in its business helps reduce the company’s dependence on any specific market, industry or geographic area. It also increases the company’s ability to adapt to changing conditions.

Zacks Rank and Stocks to Consider

Charles River currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some similar-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Gartner (IT - Free Report) and BGSF, Inc. (BGSF - Free Report) .

Avis Budget has an expected earnings growth rate of around 398.1% for the current year. The company has a trailing four-quarter earnings surprise of 76.7%, on average.

Avis Budget’s shares have surged 725% so far this year. The company has a long-term earnings growth of 27.5%.

Gartner has an expected earnings growth rate of around 102.3% for the current year. The company has a trailing four-quarter earnings surprise of 59%, on average.

Gartner’s shares have surged 108.8% so far this year. The company has a long-term earnings growth of 12%.

BGSF has an expected earnings growth rate of around more than 100% for the current year. The company has a trailing four-quarter earnings surprise of 34.1%, on average.

BGSF’s shares have surged 5.1% so far this year. The company has a long-term earnings growth of 20%.