Accenture: No Upside Potential With Low Dividend Yield

Summary:

  • Accenture has been demonstrating solid financial performance over the long term but on a per-employee basis, efficiency was not as good if we dig down to the details.
  • Currently, the company is navigating a challenging environment and remaining on the revenue growth path.
  • My valuation analysis suggests the stock is fairly valued with almost no upside potential.
  • Given the numerous risks of consulting firms, I believe that the risks outweigh the potential benefits here.

Accenture Drops Tiger Woods From Advertising Campaigns, Signs Still Remain

Justin Sullivan

Investment thesis

Accenture plc (NYSE:ACN) is one of the leading global consulting firms which delivered solid financial performance over the last decade from a high-level perspective. On the other hand, revenue per employee declined over the last decade, which for

Accenture's revenue weighted by geographic area

Accenture’s latest 10-K report

Accenture's financials over the last decade

Author’s calculations

Accenture revenue per employee metric declined

Compiled by the author based on Seeking Alpha

Accenture's balance sheet

Seeking Alpha

Accenture latest earnings

Seeking Alpha

Accenture DDM valuation

Author’s calculations

Accenture DCF valuation

Author’s calculations

Accenture valuation multiples

Seeking Alpha


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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