NYSE:ABM

Stock Analysis Report

Executive Summary

ABM Industries Incorporated provides integrated facility solutions in the United States and internationally.

Rewards

Trading at 35% below its fair value

Earnings are forecast to grow 13.9% per year

Earnings grew by 4.4% over the past year

Pays a high and reliable dividend of 1.89%

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results



Snowflake Analysis

Established dividend payer and fair value.


Similar Companies

Share Price & News

How has ABM Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ABM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.5%

ABM

0.3%

US Commercial Services

0.8%

US Market


1 Year Return

39.7%

ABM

22.8%

US Commercial Services

17.8%

US Market

Return vs Industry: ABM exceeded the US Commercial Services industry which returned 22.8% over the past year.

Return vs Market: ABM exceeded the US Market which returned 17.8% over the past year.


Shareholder returns

ABMIndustryMarket
7 Day1.5%0.3%0.8%
30 Day1.2%1.4%1.8%
90 Day3.5%4.0%4.1%
1 Year42.5%39.7%27.5%22.8%20.4%17.8%
3 Year2.2%-3.5%57.6%47.3%45.9%36.4%
5 Year50.1%36.0%101.9%81.2%68.1%49.6%

Price Volatility Vs. Market

How volatile is ABM Industries's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ABM Industries undervalued compared to its fair value and its price relative to the market?

35.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ABM ($38.13) is trading below our estimate of fair value ($58.69)

Significantly Below Fair Value: ABM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ABM is poor value based on its PE Ratio (28.7x) compared to the Commercial Services industry average (26.4x).

PE vs Market: ABM is poor value based on its PE Ratio (28.7x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: ABM is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: ABM is good value based on its PB Ratio (1.7x) compared to the US Commercial Services industry average (2x).


Next Steps

Future Growth

How is ABM Industries forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

13.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ABM's forecast earnings growth (13.9% per year) is above the savings rate (1.7%).

Earnings vs Market: ABM's earnings (13.9% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: ABM's earnings are forecast to grow, but not significantly.

Revenue vs Market: ABM's revenue (2.2% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: ABM's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ABM's Return on Equity is forecast to be low in 3 years time (9%).


Next Steps

Past Performance

How has ABM Industries performed over the past 5 years?

9.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ABM has a large one-off loss of $33.7M impacting its July 31 2019 financial results.

Growing Profit Margin: ABM's current net profit margins (1.4%) are higher than last year (1.3%).


Past Earnings Growth Analysis

Earnings Trend: ABM's earnings have grown by 9% per year over the past 5 years.

Accelerating Growth: ABM's earnings growth over the past year (4.4%) is below its 5-year average (9% per year).

Earnings vs Industry: ABM earnings growth over the past year (4.4%) exceeded the Commercial Services industry -3.1%.


Return on Equity

High ROE: ABM's Return on Equity (5.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ABM Industries's financial position?


Financial Position Analysis

Short Term Liabilities: ABM's short term assets ($1.3B) exceed its short term liabilities ($877.4M).

Long Term Liabilities: ABM's short term assets ($1.3B) do not cover its long term liabilities ($1.4B).


Debt to Equity History and Analysis

Debt Level: ABM's debt to equity ratio (62.3%) is considered high.

Reducing Debt: ABM's debt to equity ratio has increased from 32.7% to 62.3% over the past 5 years.

Debt Coverage: ABM's debt is well covered by operating cash flow (24.3%).

Interest Coverage: ABM's interest payments on its debt are well covered by EBIT (3.9x coverage).


Balance Sheet

Inventory Level: ABM has a low level of unsold assets or inventory.

Debt Coverage by Assets: ABM's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

What is ABM Industries's current dividend yield, its reliability and sustainability?

1.89%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.6%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: ABM's dividend (1.89%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: ABM's dividend (1.89%) is low compared to the top 25% of dividend payers in the US market (3.72%).


Stability and Growth of Payments

Stable Dividend: ABM's dividends per share have been stable in the past 10 years.

Growing Dividend: ABM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (53.8%), ABM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ABM's dividends in 3 years are forecast to be well covered by earnings (32.9% payout ratio).


Next Steps

Management

What is the CEO of ABM Industries's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Scott Salmirs (57yo)

4.8yrs

Tenure

US$6,022,643

Compensation

Mr. Scott B. Salmirs has been the Chief Executive Officer and President of ABM Industries Incorporated since March 31, 2015. Mr. Salmirs served as an Executive Vice President of ABM Industries Incorporated ...


CEO Compensation Analysis

Compensation vs Market: Scott's total compensation ($USD6.02M) is about average for companies of similar size in the US market ($USD5.10M).

Compensation vs Earnings: Scott's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.8yrs

Average Tenure

56.5yo

Average Age

Experienced Management: ABM's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

2.9yrs

Average Tenure

61yo

Average Age

Experienced Board: ABM's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$235,06716 Jan 19
Rene Jacobsen
EntityIndividual
Role
Senior Key Executive
Chief Facilities Services Officer
Shares6,896
Max PriceUS$34.09
SellUS$103,85010 Jan 19
Linda Chavez
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceUS$34.62

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Andrea Newborn (56yo)

    Executive VP

    • Tenure: 2.4yrs
    • Compensation: US$1.33m
  • Scott Giacobbe (57yo)

    Chief Revenue Officer

    • Tenure: 0.2yrs
    • Compensation: US$2.14m
  • Diego Scaglione (47yo)

    Chief Financial Officer

    • Tenure: 4.7yrs
    • Compensation: US$2.43m
  • Dean Chin (51yo)

    Senior VP

    • Tenure: 9.5yrs
    • Compensation: US$789.76k
  • Rene Jacobsen (58yo)

    Chief Facilities Services Officer

    • Tenure: 3.8yrs
    • Compensation: US$1.61m
  • Scott Salmirs (57yo)

    President

    • Tenure: 4.8yrs
    • Compensation: US$6.02m
  • Anthony Piniella

    Chief Communication Officer

    • Tenure: 4.1yrs
  • Brant Miller

    Senior VP and President of Technology & Manufacturing

    • Tenure: 0.7yrs
  • Kim Choi

    VP of Investor Relations & Treasurer

    • Tenure: 0yrs
  • Cary Bainbridge

    Chief Marketing Officer

    • Tenure: 0.7yrs

Board Members

  • Linda Chavez (72yo)

    Independent Director

    • Tenure: 22.9yrs
    • Compensation: US$245.12k
  • Art Garcia (57yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$238.08k
  • Wendy Webb (61yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$244.48k
  • Filippo Passerini (62yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$238.08k
  • Don Colleran (63yo)

    Independent Director

    • Tenure: 1.3yrs
    • Compensation: US$54.98k
  • Thomas Gartland (61yo)

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: US$242.46k
  • Sudhakar Kesavan (64yo)

    Independent Chairman of the Board

    • Tenure: 2.8yrs
    • Compensation: US$356.67k
  • LeighAnne Baker (60yo)

    Independent Director

    • Tenure: 1.2yrs
    • Compensation: US$1.94k
  • Jill Golder (57yo)

    Independent Director

    • Tenure: 0.3yrs
  • Scott Salmirs (57yo)

    President

    • Tenure: 4.8yrs
    • Compensation: US$6.02m

Company Information

ABM Industries Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ABM Industries Incorporated
  • Ticker: ABM
  • Exchange: NYSE
  • Founded: 1909
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: US$2.528b
  • Shares outstanding: 66.42m
  • Website: https://www.abm.com

Number of Employees


Location

  • ABM Industries Incorporated
  • One Liberty Plaza
  • 7th Floor
  • New York
  • New York
  • 10006
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ABMNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
AB4DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969

Biography

ABM Industries Incorporated provides integrated facility solutions in the United States and internationally. It operates through Business & Industry, Aviation, Technology & Manufacturing, Education, Techni ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 23:30
End of Day Share Price2019/12/11 00:00
Earnings2019/07/31
Annual Earnings2018/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.