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6 Reasons to Add Booz Allen Hamilton (BAH) to Your Portfolio

Zacks Equity Research
·3-min read

Booz Allen Hamilton Holding Corporation BAH is a Government Services stock that has performed well in the past year. The stock holds the potential to sustain the momentum, going forward. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

Let’s check out what makes Booz Allen an attractive pick.

An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of Booz Allen have returned 16.5% in the past year compared with the industry‘s growth of 9.6%.

Solid Rank & VGM Score: Booz Allen has a Zacks Rank #2 (Buy) and a Value Growth Momentum Score (VGM Score) of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities for investors. Thus, the company is a compelling investment proposition at the moment.

Northward Estimate Revisions: One estimate for 2021 moved north in the past 60 days versus no downward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2021 inched up 0.3%.

Solid Growth Prospects: The Zacks Consensus Estimate for 2021 earnings of $3.74 indicates year-over-year growth of 17.6%. Earnings are expected to increase 10.8% year over year in 2022.

Positive Earnings Surprise History: Booz Allen has an impressive earnings surprise history. The company outpaced the consensus mark in all the trailing four quarters, delivering a positive earnings surprise of 7.1%, on average.

Growth Factors: Vision 2020, Booz Allen’s transformation strategy, aimed at creating sustainable expansion is fetching significant headcount and backlog growth. Its implementation boosted the company’s organic-revenue growth and strengthened its profitability position. Notably, the company’s adjusted EPS of $1.03 increased 12% year over year in the last reported quarter. Revenues, backlog and headcount surged 11%, 7.4% and 2.4%, respectively, year over year.

Booz Allen is focusing on areas such as AI, advanced engineering, directed energy and modern digital platforms to drive innovation. It is developing mechanics and infrastructure for new and disruptive business models to enhance service quality and client satisfaction. Transformative solutions created by such efforts are expected to enhance future revenue opportunities.

Stocks to Consider

A few better-ranked stocks in the broader Zacks Business Services sector are ManpowerGroup Inc. MAN, Gartner, Inc. IT and CoreLogic, Inc. CLGX. ManpowerGroup and Gartner carry a Zacks Rank #2 (Buy), while CoreLogic sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings (three to five years) growth rate for ManpowerGroup, Gartner and CoreLogic is estimated at 3.5%, 13.5% and 12%, respectively.

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ManpowerGroup Inc. (MAN) : Free Stock Analysis Report
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