ACCENTURE PLC-CL A (NYSE:ACN) – A Quality Stock with Strong Fundamentals

ACCENTURE PLC-CL A (NYSE:ACN) was identified by our Caviar Cruise screen as a potential candidate for quality investors. The company demonstrates strong historical performance, profitability, and financial health, making it a compelling option for long-term investors. Below, we examine why ACN meets the criteria for quality investing.

Key Strengths of ACN

• Revenue and EBIT Growth: ACN has delivered consistent growth, with a 5-year revenue CAGR of 6.19% and EBIT growth of 9.74%, indicating improving operational efficiency.
• High Return on Invested Capital (ROIC): The company’s ROIC (excluding cash and goodwill) stands at 77.09%, well above the 15% threshold for quality stocks, reflecting efficient capital allocation.
• Strong Profit Quality: ACN’s 5-year average profit quality (FCF/Net Income) is 133.8%, meaning it converts net income into free cash flow at an exceptional rate.
• Low Debt Burden: With a Debt/FCF ratio of 0.50, ACN could repay its debt in just six months using current free cash flow, highlighting financial stability.

Fundamental Analysis Summary

ACN scores 6 out of 10 in our fundamental rating, performing well in profitability and financial health. Key takeaways:

• Profitability: High margins (Operating Margin: 15.53%, ROE: 26.01%) place ACN ahead of most peers.
• Dividend: A steady dividend yield of 2.00%, with a 5-year growth rate of 12.12%, though sustainability concerns exist due to slower earnings growth.
• Valuation: P/E of 23.82 is slightly below industry averages, suggesting reasonable pricing for its quality.

Our Caviar Cruise screener lists more quality stocks and is updated daily. For a deeper dive, review the full fundamental report on ACN.

Disclaimer

This is not investing advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.