A Look At Amdocs (DOX) Valuation After Its Recent Dividend Increase

Dividend increase puts Amdocs (DOX) income appeal in focus

Amdocs (DOX) has approved a higher quarterly cash dividend, lifting the payout from $0.527 per share to $0.569 per share. This change places the stock’s income profile front and center for investors.

See our latest analysis for Amdocs.

At a share price of US$81.94, Amdocs has seen a 1-day share price return of 1.07%, a 30-day share price return of 1.78%, and a year to date share price return of 2.22%. The 1 year total shareholder return of 4.77% and 3 year total shareholder return of 5.66% point to more muted long term results, even as the dividend increase draws fresh attention to its income profile.

If this dividend move has you thinking more broadly about income opportunities, it could be a good moment to scan pharma stocks with solid dividends as another source of yield focused ideas.

With the stock at US$81.94, an indicated intrinsic discount of 38.40% and a sizeable gap to the US$102.50 analyst target, you have to ask: is there real value here, or is the market already pricing in future growth?

Most Popular Narrative: 21.2% Undervalued

The most followed narrative for Amdocs pegs fair value at $104.00 versus the current $81.94, which puts a spotlight on how that gap is being justified.

The accelerating adoption of cloud, automation, and AI/ML across telecom and media sectors is driving a multi-year wave of IT stack modernization, with Amdocs winning new large-scale modernization and migration deals in cloud, generative AI, and data services. This is expanding its total addressable market and supporting sustained topline revenue growth.

Read the complete narrative.

Curious what kind of revenue profile, margin lift, and share count assumptions need to line up for that fair value to make sense? The full narrative walks through the earnings runway and the profit multiple that would have to hold for the current discount to close.

Result: Fair Value of $104.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you still need to weigh concentration in a few large telecom clients, as well as potential delays or overruns in complex multi year transformation projects.

Find out about the key risks to this Amdocs narrative.

Build Your Own Amdocs Narrative

If you see the story differently or just want to test your own assumptions against the same data, you can build a custom thesis in minutes: Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Amdocs.

Looking for more investment ideas?

If Amdocs has piqued your interest, do not stop here. Widen your watchlist with a few focused idea lists built to surface different types of opportunities.

• Spot dividend focused opportunities by checking out these 14 dividend stocks with yields > 3% that might suit an income oriented approach.
• Explore growth themes by scanning these 24 AI penny stocks tied to trends in artificial intelligence.
• Add higher risk and higher potential names by reviewing these 18 cryptocurrency and blockchain stocks linked to cryptocurrency and blockchain.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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