Accenture (ACN): Strong balance sheet with no debt and lots of cash

By J. Royden Ward, Editor of Cabot Benjamin Graham Value Letter
From Cabot Wealth Advisory 11/12/12 Sign up for free Cabot Wealth Advisory e-newsletter

Accenture Plc (ACN), based in Ireland, offers management consulting, technology solutions and outsourcing services to clients in 48 countries. The company helps customers to identify new business and technology trends, formulate and implement solutions to boost revenue, enter new markets, and deliver products and services more efficiently. During difficult economic times, such as the present, corporations seek help to cut costs, improve efficiency, and improve operations.

Accenture is winning new contracts to facilitate restructurings at client companies. In addition, it’s helping companies expand into rapidly-growing countries like Brazil, China and India as a means to offset their slow growth at home. Accenture has a lot of competition, but the company continues to take market share from its competitors. I expect revenues to increase 9% and EPS to advance 10% during the next 12 months. Accenture has a strong balance sheet with no debt and lots of cash.

ACN currently trades at 15.5 times 12-month forward EPS (earnings per share ending 8/31/13) of 4.24, with a dividend yield of 2.5%. Results could exceed our expectations if the company wins larger-sized contracts. ACN is very low risk.

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Company Details

Accenture (ACN)
1 Grand Canal Square
Grand Canal Harbour
Dublin, 2 Ireland
353 1 646 2000
Index Membership: N/A
Sector: Technology
Industry: Information Technology Services
Full Time Employees: 257,000