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Reasons to Retain FactSet (FDS) Stock in Your Portfolio

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FactSet Research Systems Inc. (FDS - Free Report) has had an impressive run on the bourses over the past year. The stock has gained 30.1% against 10.3% decline of the industry it belongs to and 8.6% growth of the Zacks S&P 500 composite.

FDS has an impressive Growth Score of B. 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.

FactSet’s 2022 and 2023 earnings are expected to improve 14.4% and 16.8%, respectively, year over year. Revenues are anticipated to rise a respective 8.2% and 9.3% in 2022 and 2023.

Factors That Bode Well

FactSet has been engaged for more than 40 years in delivering extensive data, sophisticated analytics and flexible technology to global financial professionals, and is currently benefiting from a growing customer base and strong global presence.

FactSet’s cash and cash equivalent balance of $709 million at the end of first-quarter fiscal 2022 was above the long-term debt level of $575 million, underscoring that the company has enough cash to meet its debt burden. A strong cash position allows the company to pursue strategic acquisitions, invest in growth initiatives, and return cash through regular quarterly dividend payments and share repurchases. The company has no short-term debt to clear off.

Over the years, FactSet has made several acquisitions to expedite growth. The recent buyout of Cobalt Software is expected to enhance the company’s data and workflow solutions, and expand its private markets offering. Another acquisition, BTU Analytics, expands FactSet’s industry-specific or deep-sector content for investment professionals.

Some Risks

FactSet continues to face stiff competition from other players in the market providing financial market data, analytics and related services. These competitors may be able to expand their offerings and data content more effectively, price their products more aggressively or respond more rapidly to situations developing in the marketplace in order to attract new clients and retain the existing ones.

Zacks Rank and Stocks to Consider

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

Some stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) , Accenture (ACN - Free Report) and Clean Harbors (CLH - Free Report) .

Cross Country Healthcare sports a Zacks Rank #1 (Strong Buy). The company has a long-term earnings growth of 6.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 41.5%, on average. CCRN’s shares have surged 44.2% in the past year.

Accenture carries a Zacks Rank #2 (Buy). The company has an expected earnings growth rate of 19.8% for the current year. It delivered a trailing four-quarter earnings surprise of 5.3%, on average.

Accenture’s shares have surged 16.9% in the past year. The company has a long-term earnings growth of 10%.

Clean Harbors carries a Zacks Rank #2. The company pulled off a trailing four-quarter earnings surprise of 43.2%, on average.

CLH’s shares have jumped 17.5% in the past year.

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