MAXIMUS INC (NYSE:MMS) – An Undervalued Stock with Solid Fundamentals

MAXIMUS INC (NYSE:MMS) was identified by our stock screener as a potential value opportunity. The company operates government health and human services programs and provides technology solutions to government agencies. MMS stands out due to its attractive valuation, reasonable growth prospects, and stable financial health. Below, we break down why this stock may appeal to value investors.

Valuation (Rating: 8/10)

MMS appears undervalued compared to industry peers and the broader market:

• P/E Ratio: At 14.08, MMS trades below the industry average (30.35) and the S&P 500 (25.05).
• Forward P/E: 11.73 suggests earnings growth is not fully priced in.
• Enterprise Value/EBITDA: 85% of industry peers are more expensive.
• Price/Free Cash Flow: Cheaper than 84% of competitors.

Financial Health (Rating: 5/10)

The company maintains a stable financial position:

• Altman-Z Score: 3.28 indicates low bankruptcy risk.
• Debt Management: Debt-to-Equity ratio of 0.82 is manageable, though slightly higher than some peers.
• Liquidity: Current and Quick Ratios of 1.72 suggest sufficient short-term financial flexibility.

Profitability (Rating: 6/10)

MMS delivers steady profitability:

• Return on Equity (ROE): 17.24% outperforms 80% of industry peers.
• Operating Margin: 8.69% is better than 65% of competitors.
• Profit Margin: 5.28% is above the industry median.

Growth (Rating: 6/10)

The company shows promising growth trends:

• Revenue Growth: Increased 8.19% YoY, with a 5-year average of 12.95%.
• EPS Growth: Up 40.42% over the past year, with expected annual growth of 13.35% in the coming years.

Dividend (Rating: 7/10)

MMS offers a reliable dividend:

• Yield: 1.60%, higher than most industry peers.
• Payout Ratio: 25.59% is sustainable, with a 10-year track record of consistent payments.

Our Decent Value screener lists more stocks with strong valuations and solid fundamentals.
For a deeper look, review the full fundamental report on MMS.

Disclaimer

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