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Here's Why You Should Retain FactSet (FDS) in Your Portfolio
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FactSet Research Systems Inc.’s (FDS - Free Report) top line is benefitting from higher organic growth and increase in annual subscription value.
The company’s shares have gained 3% in the past year against 0.9% decline of its industry.
It has an expected long-term (three to five years) earnings per share growth rate of 10.2%. Moreover, earnings are expected to register 11.4% growth in fiscal 2019 and 10.9% in fiscal 2020.
However, the company faces its share of headwinds. High debt laden balance sheet may limit its future expansion and worsen its risk profile. International presence exposes the company to foreign currency exchange rate fluctuations. In spite of these headwinds, we believe that the company has enough positives that justify the stock’s retention in investors’ portfolio.
Factors Driving FactSet
Solid Organic Growth
FactSet continues to grow organically on the back of strong wealth management as well as content and technology solutions (CTS) businesses. While revenues from the United States are benefiting from higher cross-selling to existing and new clients, international revenues are driven by analytics and CTS.
Organic revenues grew 6.4% in the first quarter of fiscal 2019. United States grew more than 6% and international revenues increased 7%.
Higher Annual Subscription Value
Over the years, FactSet has made several acquisitions including BISAM, IDMS, Portware LLC, Code Red, Revere Data LLC and StreetAccount. Buyouts have increased international Annual Subscription Value (ASV) contribution to the company’s total ASV.
In first-quarter fiscal 2019, FactSet’s ASV plus professional services of $1.42 billion increased 6% year over year and 6.6% organically. ASV remains in good shape in the United States and International.
Shareholder-Friendly Moves
We are impressed with FactSet’s consistent efforts of rewarding its shareholders in the form of share repurchases and dividend payments. FactSet repurchased shares worth $303.9 million in fiscal 2018, $260.9 million in fiscal 2017 and $356.8 million in fiscal 2016. Additionally, the company paid $89.4 million in dividends in fiscal 2018, $80.9 million in fiscal 2017 and $74.2 million in fiscal 2016. Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business.
A few better-ranked stocks in the broader Zacks Business Services sector are Republic Services (RSG - Free Report) , Waste Connections (WCN - Free Report) and Navigant Consulting , each carrying a Zacks Rank #2 (Buy). Long-term expected EPS (three to five years) growth rate for Republic Services, Waste Connections and Navigant is 10.7%, 11.7% and 13.5%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Here's Why You Should Retain FactSet (FDS) in Your Portfolio
FactSet Research Systems Inc.’s (FDS - Free Report) top line is benefitting from higher organic growth and increase in annual subscription value.
The company’s shares have gained 3% in the past year against 0.9% decline of its industry.
It has an expected long-term (three to five years) earnings per share growth rate of 10.2%. Moreover, earnings are expected to register 11.4% growth in fiscal 2019 and 10.9% in fiscal 2020.
However, the company faces its share of headwinds. High debt laden balance sheet may limit its future expansion and worsen its risk profile. International presence exposes the company to foreign currency exchange rate fluctuations. In spite of these headwinds, we believe that the company has enough positives that justify the stock’s retention in investors’ portfolio.
Factors Driving FactSet
Solid Organic Growth
FactSet continues to grow organically on the back of strong wealth management as well as content and technology solutions (CTS) businesses. While revenues from the United States are benefiting from higher cross-selling to existing and new clients, international revenues are driven by analytics and CTS.
Organic revenues grew 6.4% in the first quarter of fiscal 2019. United States grew more than 6% and international revenues increased 7%.
Higher Annual Subscription Value
Over the years, FactSet has made several acquisitions including BISAM, IDMS, Portware LLC, Code Red, Revere Data LLC and StreetAccount. Buyouts have increased international Annual Subscription Value (ASV) contribution to the company’s total ASV.
In first-quarter fiscal 2019, FactSet’s ASV plus professional services of $1.42 billion increased 6% year over year and 6.6% organically. ASV remains in good shape in the United States and International.
Shareholder-Friendly Moves
We are impressed with FactSet’s consistent efforts of rewarding its shareholders in the form of share repurchases and dividend payments. FactSet repurchased shares worth $303.9 million in fiscal 2018, $260.9 million in fiscal 2017 and $356.8 million in fiscal 2016. Additionally, the company paid $89.4 million in dividends in fiscal 2018, $80.9 million in fiscal 2017 and $74.2 million in fiscal 2016. Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business.
Zacks Rank & Stocks to Consider
FactSet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked stocks in the broader Zacks Business Services sector are Republic Services (RSG - Free Report) , Waste Connections (WCN - Free Report) and Navigant Consulting , each carrying a Zacks Rank #2 (Buy). Long-term expected EPS (three to five years) growth rate for Republic Services, Waste Connections and Navigant is 10.7%, 11.7% and 13.5%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>