BOOZ ALLEN HAMILTON HOLDINGS (NYSE:BAH) - A Strong Growth Stock at a Reasonable Price

BOOZ ALLEN HAMILTON HOLDINGS (NYSE:BAH) was identified as an affordable growth stock by our screener, which looks for companies with solid growth, reasonable valuations, and healthy fundamentals. BAH stands out with strong profitability and a track record of growth, while trading at a valuation that doesn’t appear stretched.

Growth Prospects

• Past Growth: BAH has delivered strong earnings growth, with EPS increasing by 15.45% over the past year and averaging 14.91% annually over several years. Revenue growth has also been robust, rising 39.95% in the last year and maintaining a steady 9.93% annual growth rate over time.
• Future Expectations: Analysts project continued growth, with EPS expected to rise by 12.70% annually and revenue forecast to expand by 8.25% per year.

Valuation

• Attractive Multiples: BAH trades at a P/E ratio of 16.48, below both the industry average (19.05) and the S&P 500 (26.17). Its forward P/E of 15.08 also suggests a reasonable valuation relative to future earnings.
• Price-to-Cash Flow: The stock is priced favorably compared to peers, with a Price/Free Cash Flow ratio that is lower than 72.84% of industry competitors.

Profitability & Financial Health

• High Returns: BAH generates strong returns, with a Return on Equity (ROE) of 109.13% and Return on Invested Capital (ROIC) of 20.59%, both well above industry averages.
• Solid Margins: Operating margins (10.21%) and profit margins (7.34%) are better than most peers.
• Debt Considerations: While BAH has a high Debt/Equity ratio (3.90), its Altman-Z score (4.79) indicates financial stability, and its liquidity metrics (Current Ratio of 1.79) are solid.

Dividend Appeal

BAH offers a dividend yield of 2.00%, slightly below the S&P 500 average but higher than most industry peers. The company has raised its dividend consistently for over a decade, with an average annual growth rate of 14.89%.

For a deeper look at BAH’s fundamentals, review the full analysis report.

Our Affordable Growth screener lists more stocks with strong growth and reasonable valuations.

Disclaimer
This is not investing advice. Always conduct your own research before making investment decisions.