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6 Reasons to Add Booz Allen (BAH) Stock to Your Portfolio

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A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.

Booz Allen Hamilton Holding Corporation (BAH - Free Report) is a Government Services stock that has performed well in the past year and has the potential to sustain the momentum, going forward. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes Booz Allen an Attractive Pick?

An Outperformer:  A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Booz Allen’s shares have rallied 27.3% compared with the industry’s 15.1% rise.

Solid Rank & VGM Score: Booz Allen has a Zacks Rank #2 (Buy) and a Value Growth Momentum Score (VGM Score) of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or #2 offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: Eight estimates for the current year moved north in the past 60 days versus no downward revision, which reflects analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2018 increased 5.6%.

Positive Earnings Surprise History: Booz Allen has an impressive earnings surprise history. The company outpaced the consensus mark in all of the trailing four quarters, delivering a positive average earnings surprise of 16.2%.

Booz Allen Hamilton Holding Corporation Price and EPS Surprise

 

 

Strong Growth Prospects:The Zacks Consensus Estimate for fiscal 2019 earnings is currently pegged at $2.64, reflecting year-over-year growth of 31.3%. Moreover, earnings are expected to register 9.7% rise in fiscal 2019. The stock has long-term expected earnings per share (EPS) growth rate of 14.4%.

Growth Factors:  Booz Allen is currently implementing Vision 2020 to counter competition and achieve sustainable long-term growth. The strategy focuses on getting closer to clients’ core missions, increasing technical content of work, attracting and retaining talent from diverse areas of expertise, increasing innovation, creating a wide network of external partners and alliances as well as expanding into commercial and international business. Through the implementation of Vision 2020, the company is seeing higher backlog growth, a shift in talent to more technical expertise and strong performance in the global commercial market.

Booz Allen developed the solutions business to create diverse business models and sales channels, increase client acquisition as well as enhance future revenue opportunities. The company also diversified itself in the talent market to ensure attraction and retention of quality talent from various disciplines. These initiatives have boosted the company’s ability to introduce various offerings, through which it has been receiving highly technical, mission-critical work for federal government business. These factors ensure long-term growth for the company.

The company is also focusing on innovation areas — Machine Intelligence and Directed Energy — to ensure business development over the long haul. On the Machine Intelligence front, Booz Allen is using machine learning and artificial intelligence to create a congenial working environment across client organizations where people and machines will collaborate to achieve targets. Through the Directed Energy business, the company is trying to help clients as a technology maturation agent, integrator and a solutions provider.

Other Stocks to Consider

A few other top-ranked stocks in the Zacks Business Services sector are General Finance Corporation , Heidrick & Struggles International, Inc (HSII - Free Report) and WNS (Holdings) Limited (WNS - Free Report) , each sporting a Zacks Rank #1.

The long-term expected EPS (three to five years) growth rate for General Finance, Heidrick & Struggles and WNS is 11%, 13.5%, and 12.5%, respectively.

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