MAXIMUS INC (NYSE:MMS) – A Dividend Stock Worth Considering

MAXIMUS INC (NYSE:MMS) was identified as a strong dividend candidate by our screening process, which focuses on stocks with a high dividend rating while maintaining solid profitability and financial health. The company operates government health and human services programs, offering stability and recurring revenue. Below, we examine why MMS stands out for dividend investors.

Dividend Strength

• Dividend Yield: MMS offers a yield of 1.63%, which is reasonable compared to the industry average of 2.35%. While not the highest, it outperforms 87.8% of its peers in the IT Services sector.
• Dividend Growth: The company has increased its dividend at an annualized rate of 3.84% over the past years, indicating a commitment to returning value to shareholders.
• Payout Ratio: Only 23.75% of earnings are allocated to dividends, suggesting sustainability and room for future increases.
• Track Record: MMS has paid dividends for at least 10 years without reductions, reinforcing its reliability.

Profitability & Financial Health

• Profitability Rating (6/10): MMS maintains a solid return on equity (17.99%) and return on invested capital (10.81%), outperforming many industry peers. Margins, though slightly declining, remain competitive.
• Financial Health (5/10): The company has a manageable debt-to-equity ratio (0.87) and sufficient liquidity, with a current ratio of 1.84. While debt levels are moderate, cash flow coverage remains stable.

Valuation

MMS trades at a P/E ratio of 13.58, below both the industry average (34.13) and the S&P 500 (26.17). Its forward P/E of 10.77 further supports an attractive valuation.

Our Best Dividend Stocks screener lists more high-quality dividend stocks and is updated daily.
For a deeper dive, review the full fundamental report on MMS.

Disclaimer

This is not investment advice. The observations here are based on current data, but investors should conduct their own research before making decisions.