Where does Accenture rank after its 10% announced dividend increase?

top-100

Accenture PLC is a global professional services company. It provides consulting services to major corporations throughout the world including digital, technology and operations services. The firm is based in Dublin, Ireland.  It generated revenues of nearly $33 million in the last fiscal year. The company maintains operations in over 120 countries and works with nearly 75% of the world’s largest companies.

Accenture Plc. announced a semi-annual dividend of $1.21, a 10 percent increase from the prior rate of $1.10 per share. The dividend will be paid at the new higher rate on November 15, 2016, to shareholders of record at close of business on October 21, 2016. Accenture Plc. is currently priced at $120.86. Accenture Plc. is a member of the top 100 dividend candidates.

Listed in the table below are the semi-annual dividend payments since 2010. Our analysis of Accenture Plc. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
10/21/2016 1.21
4/13/2016 1.1
10/14/2015 1.1
4/8/2015 1.02
10/15/2014 1.02
4/9/2014 0.93
10/9/2013 0.93
4/10/2013 0.81
10/10/2012 0.81
4/11/2012 0.675
10/12/2011 0.675
4/13/2011 0.45
10/13/2010 0.45
4/14/2010 0.375

Analysis of Accenture Plc. is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 1.98 288
Dividend Growth (3-6 year avg) 13.6%  73
Forward P/E  18.03  198
S&P Financial Rating  A++ 40
Beta  1.00  125
Total Score  724

Additional Information on P/S ratio and historical yield;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr max Yield % 5 yr lowest Yield %
1.98% 12.6% 14.6% 54.25 2.23 0.57 2.45 2.56% 1.57%

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Final Analysis;

  • Accenture’s dividend yield is on average with that of the S&P 500 Index and is at the median of its average historical dividend yield.
  • Accenture maintains an above average 3 year dividend growth rate of 12.6%.
  • Accenture has paid out a dividend consecutively for the past 12 years.
  • Accenture  is trading towards the top of its average price/sales (P/S) range at 2.23.  From a relative valuation perspective, Accenture is overvalued based upon its historical trading history.
  • Accenture maintains a credit rating of A++. This is above investment grade, a positive.
  • Accenture maintains a beta of 1.00, on average with the market.

Although the consulting IT industry is challenging, Accenture has differentiated itself from its competitors by offering complex and deep offerings for their customers. Its global reach and relationship tenure is at the top of its industry. 95% of the Fortune Global 100 firms utilize Accenture.  These relationships are very sticky as the firm offers compelling solutions to its large customer base. Accenture now reaches into the cloud and security, providing enhanced services for its customers.

Based upon its leading position in its industry, its high relative dividend growth and credit rating,  Accenture is a ranked Top 100 Dividend Stock. Accenture plc (NYSE:ACN) will report its next earnings on 21-Dec-16. The company reported the earnings of $1.31/Share in the last quarter where the estimated EPS by analysts was $1.3/share.

Accenture Plc. Dividend Yield Chart (Click to enlarge)

acn2

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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