AECOM (ACM) Initiates Quarterly Dividend Program, Retains View

To consistently return capital to shareholders, AECOM ACM initiated a recurring quarterly dividend program. On Dec 13, AECOM announced a quarterly cash dividend of 15 cents per share. The dividend will be payable on Jan 21, 2022, to shareholders of record as of the close of business on Jan 5.

This trusted infrastructure consulting firm intends to increase the dividend per share by a double-digit percentage annually. AECOM reiterated its fiscal 2022 and long-term financial targets. For fiscal 2022, it expects adjusted earnings per share (EPS) in the range of $3.20-$3.40, adjusted EBITDA within $880-$920 million and free cash flow in the band of $450-$650 million.

In the long term (through fiscal 2024), it anticipates generating adjusted EPS of at least $4.75, 15% segment adjusted operating margin and continued high conviction in delivering on its 17% longer-term margin goal.

Troy Rudd, AECOM’s chief executive officer, said, "Today’s announcement reflects the confidence we have in our operating performance and outlook for organic growth, the strength of our balance sheet, and our expectation for continued compounding of earnings at a high rate and strong free cash flow. We intend to continue to repurchase stock as part of our capital allocation program, with dividends complementing repurchases as we seek to enhance total shareholder return and attract the broadest investor base possible."

Strategic Moves to Aid AECOM

AECOM is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government as well as environmental, energy and water businesses. A major part of the U.S. government’s broad infrastructural plan is focused on transit and water markets, wherein AECOM enjoys a dominant position.

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AECOM is executing a plan to transit into a pure-play professional services firm to improve profitability and de-risk the business profile. To that end, it is in the process of exiting more than 30 countries globally to prioritize investments in markets with higher prospects and competitive advantages.

The leading professional, technical and management solution provider has been witnessing a robust pipeline of pursuits across the business. The company’s net service revenues or NSR — defined as revenues excluding subcontractors and other direct costs — are benefiting from strength across the core transportation, water and environment markets.

The stock has rallied 53.5% in a year compared with the industry’s 35.4% growth. Earnings estimates for fiscal 2022 have moved up 3.1% in the past 30 days, depicting analysts' optimism over bottom-line growth potential. The Zacks Consensus Estimate for the Zacks Rank #3 (Hold) company’s fiscal 2022 earnings indicates a 17% increase from the 2021 level. AECOM currently has good visibility into growth and a strong backlog for the upcoming quarters.

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

Some Top-Ranked Stocks in the Construction Sector

Beazer Homes USA, Inc. BZH currently sports a Zacks Rank #1. This Atlanta-based homebuilder continues to gain from strong operational execution and persistent strength in the housing market.

Beazer Homes’ shares have gained 46.1% in the past year compared with the industry’s 35.3% rally. Earnings are expected to rise 23.7% in fiscal 2022.

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TRI Pointe’s shares have surged 57.6% in the past year. Earnings for 2021 and 2022 are expected to rise 80.2% and 9.6%, respectively.

Meritage Homes Corporation MTH currently sports a Zacks Rank #1. Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor.

MTH has gained 44.9% in the past year. Earnings are expected to increase 74.4% in 2021 and 22.2% in the next year.

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