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Reasons to Hold on to ABM Industries (ABM) Stock For Now

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ABM Industries Incorporated (ABM - Free Report)  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. The stock gained 9.9% year to date.

Factors That Auger Well

ABM's multi-year comprehensive strategic plan, ELEVATE, focuses on providing clients with offerings that enhance transparency and efficiencies, developing its own talent management system capabilities, expanding data usage and modernizing the digital ecosystem. ELEVATE is expected to significantly accelerate the company’s organic growth, improve its strategic and comprehensive positioning, and reinforce profitability.

The recently closed acquisition of Able Services is expected to strengthen ABM’s engineering and technical services, and expand its sustainability and energy efficiency offerings. The buyout adds $1.1 billion in engineering and janitorial services revenues, and is anticipated to achieve around $30 million to $40 million in cost synergies for the company.

ABM has a consistent track record of returning value to shareholders through dividends. The company paid a respective $49.3 million, $47.7 million, $46 million and $39.5 million in dividends in fiscals 2020, 2019, 2018 and 2017.

Some Risks

ABM’s current ratio (a measure of liquidity) at the end of fourth-quarter 2021 stood at 1.09, which is well below the reading of 1.45 at the end of the third quarter. Also, the reading is below the year-ago figure of 1.46. The decline in current ratio does not bode well.

Zacks Rank and Stocks to Consider

ABM currently carries a Zacks Rank #3 (Hold).

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

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Cross Country Healthcare, (CCRN - Free Report) and FTI Consulting (FCN - Free Report) .

Avis Budget has an expected earnings growth rate of around 453.5% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.

Avis Budget’s shares have surged 506.9% in the past year. CAR has a long-term expected earnings growth rate of 18.8%. CAR sports a Zacks Rank #1.

Cross Country Healthcare has an expected earnings growth rate of around 500% for the current year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.

Cross Country Healthcare’s shares have surged 199.9% in the past year. CCRN has a long-term expected earnings growth rate of 21.5%. CCRN carries a Zacks Rank #1.

FTI Consulting has an expected earnings growth rate of around 11.2% for the current year. FCN has a trailing four-quarter earnings surprise of 41.8%, on average.

FTI Consulting’s shares have surged 35.8% in the past year, compared to 57.4% surge of the industry it belongs to. FCN carry a Zacks Rank #2 (Buy).