Senior Portfolio Manager Mark Vitelli of Compass Capital Management says his firm has earned a decent return on Accenture Plc (ACN) since buying the stock five years ago, and they continue to like the company for its earnings and dividend growth.
“The company has grown earnings over time in the low teens. They initiated a dividend about six years ago and have increased it nearly 30% annually. They have zero debt on the balance sheet, and the dividend yield is 2.5%,” Vitelli said.
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Accenture’s net profit margin is in the double digits, Vitelli says, and the company’s foreign revenue makes up 52% of total revenue. Vitelli was also encouraged by how Accenture came through the recession.
“If you look back in 2008 to 2009, the business held fairly steady. They were able to maintain their margins on a very modest drop in revenue while maintaining their level of profitability in dollars, and then came out the other side of the recession and continued to grow nicely,” Vitelli said.
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