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AECOM (ACM) Hikes Dividend by 20% to Boost Shareholders Value
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AECOM’s (ACM - Free Report) stock inched up 0.02% in after-hours trading on Nov 17 after it announced a hike of 20% in its quarterly cash dividend.
This well-known infrastructure consulting firm raised the quarterly dividend payout to 18 cents per share from 15 cents. The amount will be paid on Jan 20, 2023, to shareholders of record as of Jan 4. Based on the closing price of $78.67 per share on Nov 17, 2022, the stock has a dividend yield of 0.76%.
This move highlights the company’s sound and stable financial position and its commitment to reward shareholders regularly. Addressing its long-term goals, Troy Rudd, AECOM’s chief executive officer, stated, “The increase in our quarterly dividend reaffirms our long-term plan to return substantially all available cash flow to stockholders, including by raising our dividend per share by double digits annually. The strength of our balance sheet, growth strategy and consistently strong performance allowed us to return nearly $500 million to stockholders through share repurchases and dividends in fiscal 2022 as we continue to maximize value for shareholders.”
Image Source: Zacks Investment Research
In the past six months, shares of the company have gained 15.9% compared with the Zacks Engineering - R and D Services industry’s 3.4% rise. Let's see what's driving the stock.
Strong Performance & 2023 Outlook
AECOM’s fourth-quarter fiscal 2022 earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. Adjusted net service revenues, or NSR, moved up 7%. The design business contributed 90% to the total NSR and recorded year-over-year growth of 9%. The upside marked the highest quarterly growth rate in over a decade. Adjusted EBITDA also rose 7% year over year.
The company’s strong performance was backed by accelerating organic growth, strong profitability and disciplined capital allocation. In September-end, the company’s total backlog came in at $40.18 billion (including 5% growth in the design business) compared with $38.58 billion reported in the prior-year quarter. The book-to-burn ratio of 1.2 reflects a 1.2 contribution from the Americas and 1.1 from the International.
For fiscal 2023, the company anticipates generating 8% organic NSR growth, 10% improvement in adjusted EPS, a 40 basis points increase in an adjusted operating margin, and 10% rise in adjusted EBITDA compared to fiscal 2022.
Solid Project Execution & Strategic Initiatives Aid the Business
AECOM is a leading solutions provider supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government and environmental, energy and water businesses. The major part of the U.S. government’s broad infrastructural plan is focused on transit and water markets, wherein AECOM enjoys a dominant position. The company is witnessing a robust pipeline of pursuits across the business. It benefits from solid infrastructure spending in the U.K., Canada, Hong Kong and Australia.
AECOM has been executing a plan to transform the company into a pure-play professional services firm to improve profitability and de-risk the business profile. To that end, it is exiting more than 30 countries globally to prioritize investments in markets with higher prospects and competitive advantages. After divesting the Management services and Power construction businesses, the company intends to exit at-risk construction and non-core oil and gas markets.
Management is focused on leveraging scale and technical leadership by simplifying the operating model to drive greater collaboration across the business and push digital innovation. Further, improved profitability enables accelerated investments in organic growth and expanded digital capabilities through Digital AECOM — the company’s digital brand that includes a portfolio of products to more holistically serve clients on their digital transformations, which will be a key contributor toward achieving 17% longer-term margin target.
Some better-ranked stocks, which warrant a look in the same industry, include Willdan Group, Inc. (WLDN - Free Report) , Sterling Infrastructure, Inc. (STRL - Free Report) and Altair Engineering Inc. (ALTR - Free Report) , each carrying a Zacks Rank #2 (Buy).
Willdan is a nationwide provider of professional, technical, and consulting services to utilities, government agencies, and private industry.
WLDN’s expected earnings growth rate for 2023 is 18.5%.
Sterling Infrastructure provides transportation, e-infrastructure and building solutions.
STRL’s expected earnings growth rate for 2022 and 2023 is 47.4% and 6.3%, respectively.
Altair Engineering provides software and cloud solutions in simulation, high-performance computing, data analytics, and artificial intelligence worldwide.
ALTR’s expected earnings growth rate for 2022 and 2023 is 10.6% and 21.5%, respectively.
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AECOM (ACM) Hikes Dividend by 20% to Boost Shareholders Value
AECOM’s (ACM - Free Report) stock inched up 0.02% in after-hours trading on Nov 17 after it announced a hike of 20% in its quarterly cash dividend.
This well-known infrastructure consulting firm raised the quarterly dividend payout to 18 cents per share from 15 cents. The amount will be paid on Jan 20, 2023, to shareholders of record as of Jan 4. Based on the closing price of $78.67 per share on Nov 17, 2022, the stock has a dividend yield of 0.76%.
This move highlights the company’s sound and stable financial position and its commitment to reward shareholders regularly. Addressing its long-term goals, Troy Rudd, AECOM’s chief executive officer, stated, “The increase in our quarterly dividend reaffirms our long-term plan to return substantially all available cash flow to stockholders, including by raising our dividend per share by double digits annually. The strength of our balance sheet, growth strategy and consistently strong performance allowed us to return nearly $500 million to stockholders through share repurchases and dividends in fiscal 2022 as we continue to maximize value for shareholders.”
Image Source: Zacks Investment Research
In the past six months, shares of the company have gained 15.9% compared with the Zacks Engineering - R and D Services industry’s 3.4% rise. Let's see what's driving the stock.
Strong Performance & 2023 Outlook
AECOM’s fourth-quarter fiscal 2022 earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. Adjusted net service revenues, or NSR, moved up 7%. The design business contributed 90% to the total NSR and recorded year-over-year growth of 9%. The upside marked the highest quarterly growth rate in over a decade. Adjusted EBITDA also rose 7% year over year.
The company’s strong performance was backed by accelerating organic growth, strong profitability and disciplined capital allocation. In September-end, the company’s total backlog came in at $40.18 billion (including 5% growth in the design business) compared with $38.58 billion reported in the prior-year quarter. The book-to-burn ratio of 1.2 reflects a 1.2 contribution from the Americas and 1.1 from the International.
For fiscal 2023, the company anticipates generating 8% organic NSR growth, 10% improvement in adjusted EPS, a 40 basis points increase in an adjusted operating margin, and 10% rise in adjusted EBITDA compared to fiscal 2022.
Solid Project Execution & Strategic Initiatives Aid the Business
AECOM is a leading solutions provider supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government and environmental, energy and water businesses. The major part of the U.S. government’s broad infrastructural plan is focused on transit and water markets, wherein AECOM enjoys a dominant position. The company is witnessing a robust pipeline of pursuits across the business. It benefits from solid infrastructure spending in the U.K., Canada, Hong Kong and Australia.
AECOM has been executing a plan to transform the company into a pure-play professional services firm to improve profitability and de-risk the business profile. To that end, it is exiting more than 30 countries globally to prioritize investments in markets with higher prospects and competitive advantages. After divesting the Management services and Power construction businesses, the company intends to exit at-risk construction and non-core oil and gas markets.
Management is focused on leveraging scale and technical leadership by simplifying the operating model to drive greater collaboration across the business and push digital innovation. Further, improved profitability enables accelerated investments in organic growth and expanded digital capabilities through Digital AECOM — the company’s digital brand that includes a portfolio of products to more holistically serve clients on their digital transformations, which will be a key contributor toward achieving 17% longer-term margin target.
Zacks Rank & Key Picks
AECOM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks, which warrant a look in the same industry, include Willdan Group, Inc. (WLDN - Free Report) , Sterling Infrastructure, Inc. (STRL - Free Report) and Altair Engineering Inc. (ALTR - Free Report) , each carrying a Zacks Rank #2 (Buy).
Willdan is a nationwide provider of professional, technical, and consulting services to utilities, government agencies, and private industry.
WLDN’s expected earnings growth rate for 2023 is 18.5%.
Sterling Infrastructure provides transportation, e-infrastructure and building solutions.
STRL’s expected earnings growth rate for 2022 and 2023 is 47.4% and 6.3%, respectively.
Altair Engineering provides software and cloud solutions in simulation, high-performance computing, data analytics, and artificial intelligence worldwide.
ALTR’s expected earnings growth rate for 2022 and 2023 is 10.6% and 21.5%, respectively.