This Company Is Flashing A 100% Buy And Is Highly Recommended By Analysts

So far, 2023 is shaping up to repeat 2022: a rollercoaster ride. Earlier this week, we had the Dow Jones tumbling almost 700 points, and today, the S&P 500 is near its key support levels. Investors are taking a more defensive stance for at least the short term. As a result, dividend stocks have started to become even more attractive due to the increased yields and potential passive income. In these uncertain times, dividend investing can be a great investment strategy. 

Dividend stocks have historically outperformed the S&P 500 due to their capital appreciation and stable income from dividend payments. With bearish sentiment looming around the corner almost every week, investors must keep an open eye for attractive valuations- and investors need to be picky. They need to look closely at what the company does, what analysts are seeing, and any long-term potential the company might offer. 

And today, we think ABM is one of the companies worth considering.

ABM Industries (ABM)

Industries Incorporated (ABM) provides integrated facility solutions. ABM's services include janitorial, electrical & lighting, energy, HVAC & mechanical, landscape & turf, and parking provided through stand-alone or bundled service offerings.

ABM Industries was founded in 1909. The company is a global enterprise with offices throughout the United States and Canada, employing more than 124,000 people in various fields.

With its five business divisions, ABM Industries offers integrated facility, infrastructure, and mobility solutions:

• Janitorial, facilities engineering, and parking services are provided to non-acute healthcare facilities, sports and entertainment venues, and commercial real estate.
• Facility services, engineering, janitorial, and specialist services in manufacturing and distribution (M&D) are included.
• Education: cleaning, landscaping and grounds, facilities engineering, and parking services for public schools, private schools, colleges, and institutions.
• Aviation: services provided to airlines and airports range from parking and housekeeping to passenger assistance, catering logistics, air cabin repair, and transportation.
• Technical Solutions: mechanical and electrical services.

The company has a market cap of $3.18 billion and an enterprise value of $4.38 billion.

BlackRock Fund Advisors is ABM’s largest shareholder, with 15.52% of the shares outstanding. The second and third largest shareholders hold 12.31% and 10.37%, respectively. 

Recent Financials

ABM is set to release its Q1 2023 financials on March 7, 2023. Their 2022 Annual report shows the company grew its top line by 25.33%, resulting in an 82.42% net income growth. Net Cash flow showed an increase of 103.08% from the previous year as well. Reported EPS came in at $0.89, meeting expectations.

The company recently paid its quarterly dividend on February 6, 2023, of $0.22 per common share, representing an increase of 12.8%. Their current annual yield is 1.83% based on its last trading price of $48.80. Based on its historical announcement dates, ABM is expected to announce its next quarterly dividend in the 2nd week of March. ABM has continuously increased its dividend for 55 consecutive years, cementing itself on the Dividend Kings list.

Other Notable Developments

• Five-Year Partnership With The City of Chicago – ABM inked a 5-year partnership contract with the City of Chicago's O'Hare International Airport with their Integrated Facility Services Division. The partnership features a $25 million annual custodial contract.
• Launch of ABMVantage – ABM debuted its new data–enabled, driver-first Smart Parking platform ABMVantage. It is aimed to redefine parking infrastructure solutions to focus on enhanced experience for drivers and create a unified parking system design to lower operating costs and generate more revenue.

Opinions

Analysts have issued a "Strong Buy" recommendation for ABM, the highest possible recommendation rating. Six analysts gave a "strong buy" recommendation and 2 "hold" recommendations. The analyst Target Price estimate is $56.50 with a high target of $65.00 (an upside of 34%). 

Interestingly, Barchart's Opinion Rating also has an overall 100% buy rating from its short-, medium- and long-term indicators. Its 3-day strength and direction have been giving positive signals as well. 

Final Thoughts

While many companies face challenges with inflation and higher interest rates, ABM Industries is thriving - as they have for decades. ABM is famous for focusing on client experience using multiservice solutions and using technology, data, and analytics to help grow their business. 

While analysts and opinion ratings give great insights into a stock's potential, always perform due diligence in making investment decisions. Forecasts and Opinions may have their own biases that can lead to making investments that do not suit your strategy and long-term goals.

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