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ManpowerGroup (MAN) Rides on Strong Cash Position, Cost Control

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ManpowerGroup Inc. MAN is currently benefiting from strong pricing and cost-control initiatives.

The company recently reported first-quarter 2021 adjusted earnings of $1.11 per share that beat the Zacks Consensus Estimate by 68.2% and increased 35.4% year over year. Revenues of $4.92 billion surpassed the consensus mark by 5.6% and inched up 7% year over year.

ManpowerGroup’s shares have gained a massive 67.3% over the past year, significantly outperforming the Zacks S&P 500 composite’s 41.5% rally.

The company is trying to strengthen its top line through strong pricing and cost control. Its Managed Service Provider business is resilient to the coronavirus crisis and continues to witness decent growth as it assists more clients in building customized workforce solutions.

Commitment to shareholder returns makes ManpowerGroup a reliable investment to compound wealth over long term. The company returned $264.7 million, $203 million and $500.7 million through share repurchases and made dividend payments of $129.1 million, $129.3 million and $127.3 million, respectively, in 2020, 2019 and 2018. These initiatives not only instill investors' confidence but also positively impact earnings per share.

ManpowerGroup's cash and cash equivalent balance of $1.52 billion at the end of the first quarter was well above the total debt level of $1.08 billion, underscoring that the company has enough cash to meet its debt burden. A strong cash position enables the company to pursue strategic acquisitions, invest in growth initiatives and return cash through regular quarterly dividend payment and share repurchases.

Zacks Rank and Stocks to Consider

ManpowerGroup currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the broader Zacks Business Services sector are Genpact G, Equifax EFX and TransUnion TRU, each carrying a Zacks Rank #2.

The long-term expected earnings per share (three to five years) growth rate for Genpact, Equifax and TransUnion is 12.8%, 14% and 20.9%, respectively.

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