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Here's Why Maximus (MMS) Deserves to Be in Your Portfolio
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Maximus, Inc.(MMS - Free Report) a leading government health and human services program operator, is reaping the benefits of consistent dividend payments, strategic acquisitions and profitable partnerships with the government.
Let’s delve into the factors that make MMS an attractive investment option.
Price Performance
MMS has outperformed the Zacks Government Services industry year to date. The stock has rallied 14.8% against the industry's 1.2% decline in the same time frame.
MMS currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bullish Industry Rank
The industry to which Maximus belongs currently has a Zacks Industry Rank of 4 (of 251 groups). Such a solid rank places the industry in the top 2% of the Zacks industries. Studies show that 50% of a stock’s price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Earnings Expectations
Earnings growth and stock price gains often indicate a company’s prospects. The Zacks Consensus Estimate of earnings for full-year 2023 is pegged at $4.16. This has been revised upward 2.7% in the past 60 days.The favorable estimate revision reflects the confidence of brokers.
Earnings History
The company has an impressive earning surprise history beating the Zacks Consensus Estimate in three of the four trailing quarters and missing on one occasion. Maximus has an average surprise of 11.3%.
Improving Outlook
Maximus expects revenues for 2023 to be around $4.85-$5 billion, revised upward from $4.75-4.9 billion. The adjusted operating income is expected to be in the band of $415-$440 million, up from the $390-$415 million band. Adjusted EPS is anticipated to be in the $4.00-$4.30 range, up from $3.70-$4.00 per share. The Zacks Consensus Estimate of earnings for the full year is pegged at $4.16, which is near the mid-point of the guided range.
Other Positive Factors
Maximus is banking on volume growth due to strong demand and new contract wins in the core business portfolio like clinical services business and eligibility support. The U.S. services segment is expected to benefit from the resumption of redetermination work from the third fiscal quarter. The effects of the expected redetermination work are visible in the company’s latest guidance as well.
Approaches to reduce debt by using its free cash flow and long-term focus on strategic acquisitions to boost organic growth are expected to be MMS’ growth drivers. The company has been gaining from its focus areas namely future of health, advanced technologies for modernization, and digitally enabled customer services.
The company has been pursuing acquisitions diligently and strategically to add to its business processes, technical abilities, skill set and client relationships. The acquisition of VES Group, Inc. in 2021 and Aidvantage at the beginning of 2022 were followed by many similar acquisitions.
Maximus’ consistent dividend paying endeavors are also praiseworthy. The company paid $68.7 million, $68.8 million and $70.2 million, as dividends in the year 2022, 2021 and 2020 respectively.
Other Stocks to Consider
Investors interested in the broader Zacks Business Service sector may consider the following stocks:
Avis Budget Group (CAR - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 52.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 78%. Revenues are expected to be $2.5 billion for the first quarter of 2023 which indicates a 3% year-over-year increase. The Zacks Consensus Estimate for the company’s earnings is pegged at $3.50 for the first quarter and $28.66 for the full year.
ICF International (ICFI - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 4.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 9.2%. Revenues are expected to be $478.24 million for the first quarter of 2023 which indicates a 15.7% year-over-year increase. The Zacks Consensus Estimate for ICFI’s earnings is pegged at $1.41 for the first quarter and $6.30 for the full year, indicating growth of 7.6% and 9.2%, respectively.
Gartner, Inc. (IT - Free Report) , holding a Zacks Rank of 2, delivered an earnings surprise of 44% in the last reported quarter. It came up with an average surprise of 33%. Revenues are expected to be $1.39 billion for the first quarter of 2023, which indicates a 10.2% year-over-year increase. The Zacks Consensus Estimate for IT’s earnings is pegged at $2.04 for the first quarter and $9.49 for the full year.
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Here's Why Maximus (MMS) Deserves to Be in Your Portfolio
Maximus, Inc.(MMS - Free Report) a leading government health and human services program operator, is reaping the benefits of consistent dividend payments, strategic acquisitions and profitable partnerships with the government.
Let’s delve into the factors that make MMS an attractive investment option.
Price Performance
MMS has outperformed the Zacks Government Services industry year to date. The stock has rallied 14.8% against the industry's 1.2% decline in the same time frame.
Maximus, Inc. Price
Maximus, Inc. price | Maximus, Inc. Quote
Solid Rank
MMS currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bullish Industry Rank
The industry to which Maximus belongs currently has a Zacks Industry Rank of 4 (of 251 groups). Such a solid rank places the industry in the top 2% of the Zacks industries. Studies show that 50% of a stock’s price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Earnings Expectations
Earnings growth and stock price gains often indicate a company’s prospects. The Zacks Consensus Estimate of earnings for full-year 2023 is pegged at $4.16. This has been revised upward 2.7% in the past 60 days.The favorable estimate revision reflects the confidence of brokers.
Earnings History
The company has an impressive earning surprise history beating the Zacks Consensus Estimate in three of the four trailing quarters and missing on one occasion. Maximus has an average surprise of 11.3%.
Improving Outlook
Maximus expects revenues for 2023 to be around $4.85-$5 billion, revised upward from $4.75-4.9 billion. The adjusted operating income is expected to be in the band of $415-$440 million, up from the $390-$415 million band. Adjusted EPS is anticipated to be in the $4.00-$4.30 range, up from $3.70-$4.00 per share. The Zacks Consensus Estimate of earnings for the full year is pegged at $4.16, which is near the mid-point of the guided range.
Other Positive Factors
Maximus is banking on volume growth due to strong demand and new contract wins in the core business portfolio like clinical services business and eligibility support. The U.S. services segment is expected to benefit from the resumption of redetermination work from the third fiscal quarter. The effects of the expected redetermination work are visible in the company’s latest guidance as well.
Approaches to reduce debt by using its free cash flow and long-term focus on strategic acquisitions to boost organic growth are expected to be MMS’ growth drivers. The company has been gaining from its focus areas namely future of health, advanced technologies for modernization, and digitally enabled customer services.
The company has been pursuing acquisitions diligently and strategically to add to its business processes, technical abilities, skill set and client relationships. The acquisition of VES Group, Inc. in 2021 and Aidvantage at the beginning of 2022 were followed by many similar acquisitions.
Maximus’ consistent dividend paying endeavors are also praiseworthy. The company paid $68.7 million, $68.8 million and $70.2 million, as dividends in the year 2022, 2021 and 2020 respectively.
Other Stocks to Consider
Investors interested in the broader Zacks Business Service sector may consider the following stocks:
Avis Budget Group (CAR - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 52.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 78%. Revenues are expected to be $2.5 billion for the first quarter of 2023 which indicates a 3% year-over-year increase. The Zacks Consensus Estimate for the company’s earnings is pegged at $3.50 for the first quarter and $28.66 for the full year.
ICF International (ICFI - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 4.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 9.2%. Revenues are expected to be $478.24 million for the first quarter of 2023 which indicates a 15.7% year-over-year increase. The Zacks Consensus Estimate for ICFI’s earnings is pegged at $1.41 for the first quarter and $6.30 for the full year, indicating growth of 7.6% and 9.2%, respectively.
Gartner, Inc. (IT - Free Report) , holding a Zacks Rank of 2, delivered an earnings surprise of 44% in the last reported quarter. It came up with an average surprise of 33%. Revenues are expected to be $1.39 billion for the first quarter of 2023, which indicates a 10.2% year-over-year increase. The Zacks Consensus Estimate for IT’s earnings is pegged at $2.04 for the first quarter and $9.49 for the full year.