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

Dividend stocks can be a reliable source of passive income for investors, especially when they come from financially stable companies with a history of consistent payouts. MAXIMUS INC (NYSE:MMS) is one such stock that stands out due to its solid fundamentals and attractive dividend profile.

Why MAXIMUS INC (NYSE:MMS) Stands Out

MAXIMUS INC operates in the IT Services industry, providing government health and human services programs along with technology solutions. The company has demonstrated financial stability, profitability, and a commitment to returning value to shareholders through dividends.

Key Dividend Metrics

• Dividend Yield: 1.74%
• Dividend Growth: 3.84% (annualized over the past five years)
• Payout Ratio: 25.59% (indicating a sustainable dividend)

The company has maintained dividend payments for at least 10 years without reductions, showcasing reliability. Additionally, its payout ratio is low, meaning earnings comfortably cover dividend obligations, reducing the risk of future cuts.

Financial Health & Profitability

• ChartMill Health Rating: 5/10 (average financial health)
• ChartMill Profitability Rating: 6/10 (decent profitability)
• Return on Equity (ROE): 17.24% (above industry peers)

While the financial health score is moderate, MAXIMUS INC has been reducing debt and maintaining liquidity, with a current ratio of 1.72, indicating sufficient short-term financial flexibility.

Valuation

• P/E Ratio: 14.29 (cheaper than 76.83% of industry peers)
• Forward P/E Ratio: 10.34 (undervalued compared to the S&P 500 average of 21.20)

The stock trades at a discount relative to both its industry and broader market, making it an appealing option for value investors.

Growth Prospects

MAXIMUS INC has shown strong revenue growth (8.01% YoY) and earnings expansion (53.97% YoY). Analysts expect continued earnings growth at 13.35% annually, supporting future dividend increases.

For a deeper dive into the company's fundamentals, review the full fundamental analysis report here.

Final Thoughts

MAXIMUS INC (NYSE:MMS) presents a balanced opportunity for dividend investors, combining a reliable payout history with reasonable valuation and growth potential. While no investment is without risk, the company’s financial discipline and industry position make it a candidate worth further research.

For more high-quality dividend stock ideas, explore the Best Dividend Stocks screen.