NYSE:MMS

Stock Analysis Report

Executive Summary

MAXIMUS, Inc. provides business process services (BPS) to government health and human services programs worldwide.

Rewards

Trading at 27.8% below its fair value

Earnings are forecast to grow 4.21% per year

Earnings have grown 10.7% per year over the past 5 years

Pays a high and reliable dividend of 1.49%

Risk Analysis

No risks detected for MMS from our risk checks.


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.4%

MMS

2.9%

US IT

1.7%

US Market


1 Year Return

8.5%

MMS

40.8%

US IT

23.6%

US Market

Return vs Industry: MMS underperformed the US IT industry which returned 39.9% over the past year.

Return vs Market: MMS underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

MMSIndustryMarket
7 Day-0.4%2.9%1.7%
30 Day0.2%6.3%3.5%
90 Day-1.0%15.9%11.7%
1 Year10.0%8.5%42.3%40.8%26.2%23.6%
3 Year36.1%33.0%110.2%101.2%53.2%43.3%
5 Year35.6%31.7%153.8%131.2%75.5%56.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

27.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MMS ($75.23) is trading below our estimate of fair value ($104.26)

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


Price To Earnings Ratio

PE vs Industry: MMS is good value based on its PE Ratio (20.1x) compared to the IT industry average (32x).

PE vs Market: MMS is poor value based on its PE Ratio (20.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: MMS is poor value based on its PEG Ratio (4.8x)


Price to Book Ratio

PB vs Industry: MMS is good value based on its PB Ratio (3.9x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

How is MAXIMUS forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

4.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MMS's forecast earnings growth (4.2% per year) is above the savings rate (1.7%).

Earnings vs Market: MMS's earnings (4.2% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: MMS's revenue (2.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: MMS's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MMS's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has MAXIMUS performed over the past 5 years?

10.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MMS has high quality earnings.

Growing Profit Margin: MMS's current net profit margins (8.3%) are lower than last year (9.2%).


Past Earnings Growth Analysis

Earnings Trend: MMS's earnings have grown by 10.7% per year over the past 5 years.

Accelerating Growth: MMS's earnings growth over the past year (9.1%) is below its 5-year average (10.7% per year).

Earnings vs Industry: MMS earnings growth over the past year (9.1%) underperformed the IT industry 16.2%.


Return on Equity

High ROE: MMS's Return on Equity (19.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is MAXIMUS's financial position?


Financial Position Analysis

Short Term Liabilities: MMS's short term assets ($789.4M) exceed its short term liabilities ($364.2M).

Long Term Liabilities: MMS's short term assets ($789.4M) exceed its long term liabilities ($133.3M).


Debt to Equity History and Analysis

Debt Level: MMS's debt to equity ratio (0.8%) is considered satisfactory.

Reducing Debt: MMS's debt to equity ratio has increased from 0.2% to 0.8% over the past 5 years.

Debt Coverage: MMS's debt is well covered by operating cash flow (3693.6%).

Interest Coverage: MMS's interest payments on its debt are well covered by EBIT (108.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: MMS's debt is covered by short term assets (assets are 81.7x debt).


Next Steps

Dividend

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

1.49%

Current Dividend Yield


Upcoming Dividend Payment

Purchase MAXIMUS before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: MMS's dividend (1.49%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: MMS's dividend (1.49%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.8%), MMS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MMS's dividends in 3 years are forecast to be well covered by earnings (23.2% payout ratio).


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Bruce Caswell (52yo)

1.8yrs

Tenure

US$3,174,375

Compensation

Mr. Bruce L. Caswell has been Chief Executive Officer and Director of MAXIMUS, Inc. since April 1, 2018. Mr. Caswell has been the President at MAXIMUS Inc. since October 1, 2014 and served as its General M ...


CEO Compensation Analysis

Compensation vs Market: Bruce's total compensation ($USD3.17M) is below average for companies of similar size in the US market ($USD6.46M).

Compensation vs Earnings: Bruce's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

58.5yo

Average Age

Experienced Management: MMS's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

3.1yrs

Average Tenure

69yo

Average Age

Experienced Board: MMS's board of directors are considered experienced (3.1 years average tenure).


Insider Trading

Insider Buying: MMS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$511,64818 Dec 19
Thomas Romeo
EntityIndividual
Shares6,758
Max PriceUS$75.71
SellUS$1,997,35517 Sep 19
Raymond Ruddy
EntityIndividual
Role
Vice Chairman
Independent Vice Chairman
Shares25,000
Max PriceUS$79.89
SellUS$470,29014 Feb 19
Paul Lederer
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,715
Max PriceUS$70.27

Ownership Breakdown

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


Management Team

  • David Francis (58yo)

    General Counsel & Secretary

    • Tenure: 21.4yrs
    • Compensation: US$1.15m
  • David Casey (59yo)

    Senior Vice President of Government Relations & Business Development

    • Rich Montoni (67yo)

      Vice Chairman & Senior Advisor to the CEO

      • Tenure: 1.8yrs
      • Compensation: US$894.38k
    • Mark Andrekovich (57yo)

      Executive Officer

      • Tenure: 0.4yrs
      • Compensation: US$1.17m
    • Bruce Caswell (52yo)

      President

      • Tenure: 1.8yrs
      • Compensation: US$3.17m
    • Rick Nadeau (64yo)

      CFO & Treasurer

      • Tenure: 5.6yrs
      • Compensation: US$1.88m
    • Deborah Homewood

      Managing Director of Human Services - Australia

      • Lisa Miles

        Senior Vice President of Investor Relations & Corporate Communications

        • John Lambeth

          Chief Information Officer

          • Tenure: 1.4yrs
        • Jericho Seguin

          Senior Vice President of Corporate Development

          • Tenure: 4yrs

        Board Members

        • Raymond Ruddy (76yo)

          Independent Vice Chairman

          • Tenure: 14.3yrs
          • Compensation: US$335.02k
        • Russell Beliveau (71yo)

          Independent Director

          • Tenure: 25yrs
          • Compensation: US$300.00k
        • Rich Montoni (67yo)

          Vice Chairman & Senior Advisor to the CEO

          • Tenure: 1.8yrs
          • Compensation: US$894.38k
        • Paul Lederer (80yo)

          Independent Director

          • Tenure: 16.8yrs
          • Compensation: US$300.00k
        • Peter Pond (74yo)

          Independent Non-Executive Chairman

          • Tenure: 18.3yrs
          • Compensation: US$485.00k
        • Bruce Caswell (52yo)

          President

          • Tenure: 1.8yrs
          • Compensation: US$3.17m
        • Anne Altman (60yo)

          Independent Director

          • Tenure: 3.1yrs
          • Compensation: US$300.02k
        • Gayathri Rajan (51yo)

          Independent Director

          • Tenure: 3.1yrs
          • Compensation: US$299.99k
        • Michael Warren

          Director

          • Tenure: 0.8yrs

        Company Information

        MAXIMUS, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: MAXIMUS, Inc.
        • Ticker: MMS
        • Exchange: NYSE
        • Founded: 1975
        • Industry: Data Processing and Outsourced Services
        • Sector: Software
        • Market Cap: US$4.817b
        • Shares outstanding: 63.98m
        • Website: https://www.maximus.com

        Number of Employees


        Location

        • MAXIMUS, Inc.
        • 1891 Metro Center Drive
        • Reston
        • Virginia
        • 20190
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        MMSNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1997
        MMYDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1997

        Biography

        MAXIMUS, Inc. provides business process services (BPS) to government health and human services programs worldwide. It operates through three segments: U.S. Health and Human Services, U.S. Federal Services, and Outside the U.S. The U.S. Health and Human Services segment offers various BPS, appeals, and assessments for state, provincial, and national government programs, including Medicaid, Children's Health Insurance Program, Affordable Care Act, Health Insurance British Columbia, Health Assessment Advisory Service contract, and Preadmission Screening and Resident Reviews. This segment offers program eligibility support and enrollment; application assistance and independent health plan enrollment counseling; and beneficiary outreach, education, eligibility, enrollment, and renewal. It also provides independent disability, long-term sick, and other health assessment; specialized consulting; and centralized multilingual customer contact centers and multichannel self-service options for enrollment. The U.S. Federal Services segment offers centralized citizen engagement centers and support services; document and record management; case management, citizen support, and consumer education; independent medical reviews and worker's compensation benefit appeals; and Medicare and Medicaid appeals, and program eligibility appeals. It also provides modernization of systems and information technology infrastructure; infrastructure operations and support services; software development, operations, and management services; and data analytics services. The Outside the U.S. segment offers BPS solutions for governments and commercial clients outside the United States, including health and disability assessments, program administration for welfare-to-work services, and other related services. The company was founded in 1975 and is headquartered in Reston, Virginia. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/20 23:42
        End of Day Share Price2020/01/17 00:00
        Earnings2019/09/30
        Annual Earnings2019/09/30


        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.