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5 Reasons to Have MAXIMUS (MMS) Stock in Your Portfolio

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MAXIMUS, Inc.’s (MMS - Free Report) stock has had an impressive run on the bourse in the past year. It appreciated a 14.6% significantly outperforming the Zacks S&P 500 composite’s rally of 7.3%.

So, if you haven’t taken advantage of this share price appreciation yet, we believe it’s time you add this government services stock to your portfolio as it has the potential to sustain the momentum in the near term.

What Makes it an Attractive Pick?

Solid Rank & VGM Score: MAXIMUS 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: Three estimates for fiscal 2019 moved north in the past 60 days versus one downward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2019 inched up 1.1%.

Positive Earnings Surprise History: MAXIMUS has an impressive earnings surprise history. The company outpaced the consensus mark in three of the trailing four quarters and matched estimates in one. Its average four-quarter positive earnings surprise is 9%.

Strong Growth Prospects:The Zacks Consensus Estimate for fiscal 2019 earnings is currently pegged at $3.70, reflecting year-over-year growth of 8.8%. Moreover, earnings are expected to register 11.5% growth in fiscal 2020. The stock has long-term expected earnings per share (EPS) growth rate of 10%.

Growth Drivers: MAXIMUS continues to focus on digital transformation, clinical evolution and market expansion.

On the digital front, the company is developing solution sets aimed at achieving operational and cost efficiencies through techniques such as artificial intelligence, cloud migration services, robotic process automation (RPA) and machine learning. It is implementing digital innovations within business process management and as direct service offerings to enhance the portfolio of citizen services and federal capabilities.

On the clinical front, MAXIMUS has undertaken work as a subcontractor, performing medical record indexing and providing outreach and engagement services.

Maximus, Inc. Net Income (TTM)

 

 

The 2018 acquisition of General Dynamics Information Technology's citizen engagement centers brought in additional cost-plus contracts, enhanced technology and added operational capabilities. The company expects $600-$625 million revenue contribution from this buyout in fiscal 2019.

Other Stocks to Consider

Other top-ranked stocks in the broader Zacks Business Services sector are FLEETCOR Technologies , Visa (V - Free Report) and NV5 Global (NVEE - Free Report) , each carrying a Zacks Rank #2.

Long-term expected EPS (three to five years) growth rate for FLEETCOR, Global Payments and NV5 Global is 15.4%, 16.5% and 20%, respectively.

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