MAXIMUS INC (MMS) Stock Fundamental Analysis
NYSE:MMS - New York Stock Exchange, Inc. - US5779331041 - Common Stock - Currency: USD
MMS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 82 industry peers in the IT Services industry. MMS has only an average score on both its financial health and profitability. MMS may be a bit undervalued, certainly considering the very reasonable score on growth MMS also has an excellent dividend rating. These ratings could make MMS a good candidate for value and dividend investing.
1. Profitability
1.1 Basic Checks
In the past year MMS was profitable.
In the past year MMS had a positive cash flow from operations.
MMS had positive earnings in each of the past 5 years.
Each year in the past 5 years MMS had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.14%, MMS is in the better half of the industry, outperforming 73.17% of the companies in the same industry.
MMS has a better Return On Equity (17.99%) than 81.71% of its industry peers.
MMS has a better Return On Invested Capital (10.81%) than 73.17% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MMS is significantly below the industry average of 22.83%.
The 3 year average ROIC (8.80%) for MMS is below the current ROIC(10.81%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.14% | ||
| ROE | 17.99% | ||
| ROIC | 10.81% |
ROA(3y)5.53%
ROA(5y)6.85%
ROE(3y)13.17%
ROE(5y)15.29%
ROIC(3y)8.8%
ROIC(5y)10.15%
1.3 Margins
Looking at the Profit Margin, with a value of 5.56%, MMS is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
MMS's Profit Margin has declined in the last couple of years.
MMS's Operating Margin of 9.14% is fine compared to the rest of the industry. MMS outperforms 65.85% of its industry peers.
MMS's Operating Margin has declined in the last couple of years.
MMS has a Gross Margin of 23.62%. This is in the lower half of the industry: MMS underperforms 71.95% of its industry peers.
MMS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.14% | ||
| PM (TTM) | 5.56% | ||
| GM | 23.62% |
OM growth 3Y-1.13%
OM growth 5Y-3.32%
PM growth 3Y-5.46%
PM growth 5Y-7.06%
GM growth 3Y1.95%
GM growth 5Y0.29%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MMS is still creating some value.
The number of shares outstanding for MMS has been reduced compared to 1 year ago.
MMS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MMS has an improved debt to assets ratio.
2.2 Solvency
MMS has an Altman-Z score of 3.20. This indicates that MMS is financially healthy and has little risk of bankruptcy at the moment.
MMS has a Altman-Z score of 3.20. This is comparable to the rest of the industry: MMS outperforms 58.54% of its industry peers.
MMS has a debt to FCF ratio of 6.82. This is a slightly negative value and a sign of low solvency as MMS would need 6.82 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.82, MMS is in line with its industry, outperforming 45.12% of the companies in the same industry.
A Debt/Equity ratio of 0.87 indicates that MMS is somewhat dependend on debt financing.
MMS has a Debt to Equity ratio of 0.87. This is in the lower half of the industry: MMS underperforms 60.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.87 | ||
| Debt/FCF | 6.82 | ||
| Altman-Z | 3.2 |
ROIC/WACC1.11
WACC9.7%
2.3 Liquidity
A Current Ratio of 1.84 indicates that MMS should not have too much problems paying its short term obligations.
MMS has a Current ratio of 1.84. This is in the better half of the industry: MMS outperforms 62.20% of its industry peers.
A Quick Ratio of 1.84 indicates that MMS should not have too much problems paying its short term obligations.
MMS has a better Quick ratio (1.84) than 62.20% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.84 |
3. Growth
3.1 Past
MMS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.42%, which is quite impressive.
The Earnings Per Share has been growing slightly by 6.09% on average over the past years.
The Revenue has been growing slightly by 5.29% in the past year.
The Revenue has been growing by 12.95% on average over the past years. This is quite good.
EPS 1Y (TTM)40.42%
EPS 3Y2.38%
EPS 5Y6.09%
EPS Q2Q%53.44%
Revenue 1Y (TTM)5.29%
Revenue growth 3Y7.64%
Revenue growth 5Y12.95%
Sales Q2Q%1%
3.2 Future
Based on estimates for the next years, MMS will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.16% on average per year.
MMS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.93% yearly.
EPS Next Y31.3%
EPS Next 2Y16.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year0.79%
Revenue Next 2Y1.93%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.96, MMS is valued correctly.
80.49% of the companies in the same industry are more expensive than MMS, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of MMS to the average of the S&P500 Index (26.35), we can say MMS is valued slightly cheaper.
The Price/Forward Earnings ratio is 11.07, which indicates a very decent valuation of MMS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MMS indicates a rather cheap valuation: MMS is cheaper than 87.80% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.20. MMS is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.96 | ||
| Fwd PE | 11.07 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MMS is valued cheaply inside the industry as 87.80% of the companies are valued more expensively.
MMS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MMS is cheaper than 70.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.22 | ||
| EV/EBITDA | 9.01 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of MMS may justify a higher PE ratio.
MMS's earnings are expected to grow with 16.16% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.45
PEG (5Y)2.29
EPS Next 2Y16.16%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.63%, MMS has a reasonable but not impressive dividend return.
MMS's Dividend Yield is rather good when compared to the industry average which is at 2.35. MMS pays more dividend than 87.80% of the companies in the same industry.
MMS's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
5.2 History
The dividend of MMS has a limited annual growth rate of 3.84%.
MMS has paid a dividend for at least 10 years, which is a reliable track record.
MMS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.84%
Div Incr Years2
Div Non Decr Years19
5.3 Sustainability
23.75% of the earnings are spent on dividend by MMS. This is a low number and sustainable payout ratio.
The dividend of MMS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP23.75%
EPS Next 2Y16.16%
EPS Next 3YN/A
74.7
+2.3 (+3.18%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners103.55%
Inst Owner Change1.07%
Ins Owners0.75%
Ins Owner Change-1.33%
Market Cap4.21B
Analysts80
Price Target104.04 (39.28%)
Short Float %2.68%
Short Ratio2.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
Yearly Dividend1.2
Dividend Growth(5Y)3.84%
DP23.75%
Div Incr Years2
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.33%
Min EPS beat(2)-35.55%
Max EPS beat(2)44.21%
EPS beat(4)2
Avg EPS beat(4)-1.16%
Min EPS beat(4)-35.55%
Max EPS beat(4)44.21%
EPS beat(8)4
Avg EPS beat(8)-0.71%
EPS beat(12)5
Avg EPS beat(12)-1.15%
EPS beat(16)8
Avg EPS beat(16)2.36%
Revenue beat(2)2
Avg Revenue beat(2)5.96%
Min Revenue beat(2)4.19%
Max Revenue beat(2)7.73%
Revenue beat(4)3
Avg Revenue beat(4)3.23%
Min Revenue beat(4)-0.31%
Max Revenue beat(4)7.73%
Revenue beat(8)5
Avg Revenue beat(8)1.92%
Revenue beat(12)8
Avg Revenue beat(12)2.28%
Revenue beat(16)12
Avg Revenue beat(16)3.48%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)-9.29%
EPS NQ rev (3m)8.43%
EPS NY rev (1m)6.56%
EPS NY rev (3m)6.56%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.53%
Revenue NY rev (1m)0.71%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.96 | ||
| Fwd PE | 11.07 | ||
| P/S | 0.78 | ||
| P/FCF | 19.22 | ||
| P/OCF | 12.92 | ||
| P/B | 2.52 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.01 |
EPS(TTM)5.35
EY7.16%
EPS(NY)6.75
Fwd EY9.03%
FCF(TTM)3.89
FCFY5.2%
OCF(TTM)5.78
OCFY7.74%
SpS95.75
BVpS29.59
TBVpS-16.12
PEG (NY)0.45
PEG (5Y)2.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.14% | ||
| ROE | 17.99% | ||
| ROCE | 14.18% | ||
| ROIC | 10.81% | ||
| ROICexc | 11.15% | ||
| ROICexgc | 47.32% | ||
| OM | 9.14% | ||
| PM (TTM) | 5.56% | ||
| GM | 23.62% | ||
| FCFM | 4.06% |
ROA(3y)5.53%
ROA(5y)6.85%
ROE(3y)13.17%
ROE(5y)15.29%
ROIC(3y)8.8%
ROIC(5y)10.15%
ROICexc(3y)9.11%
ROICexc(5y)10.57%
ROICexgc(3y)51.88%
ROICexgc(5y)50.78%
ROCE(3y)11.55%
ROCE(5y)13.32%
ROICexcg growth 3Y3.62%
ROICexcg growth 5Y6.66%
ROICexc growth 3Y7.03%
ROICexc growth 5Y-8.8%
OM growth 3Y-1.13%
OM growth 5Y-3.32%
PM growth 3Y-5.46%
PM growth 5Y-7.06%
GM growth 3Y1.95%
GM growth 5Y0.29%
F-Score7
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.87 | ||
| Debt/FCF | 6.82 | ||
| Debt/EBITDA | 2.33 | ||
| Cap/Depr | 83.56% | ||
| Cap/Sales | 1.98% | ||
| Interest Coverage | 6.34 | ||
| Cash Conversion | 52.47% | ||
| Profit Quality | 73.01% | ||
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.84 | ||
| Altman-Z | 3.2 |
F-Score7
WACC9.7%
ROIC/WACC1.11
Cap/Depr(3y)69.43%
Cap/Depr(5y)57.85%
Cap/Sales(3y)1.85%
Cap/Sales(5y)1.52%
Profit Quality(3y)125.89%
Profit Quality(5y)127.56%
High Growth Momentum
Growth
EPS 1Y (TTM)40.42%
EPS 3Y2.38%
EPS 5Y6.09%
EPS Q2Q%53.44%
EPS Next Y31.3%
EPS Next 2Y16.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)5.29%
Revenue growth 3Y7.64%
Revenue growth 5Y12.95%
Sales Q2Q%1%
Revenue Next Year0.79%
Revenue Next 2Y1.93%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y25.67%
EBIT growth 3Y6.43%
EBIT growth 5Y9.2%
EBIT Next Year27.35%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-23.38%
FCF growth 3Y-7.29%
FCF growth 5Y5.73%
OCF growth 1Y-7.66%
OCF growth 3Y-0.13%
OCF growth 5Y7.63%