Kalkine Media explores top US services stocks to watch in September

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Kalkine Media explores top US services stocks to watch in September

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 Kalkine Media explores top US services stocks to watch in September
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Highlights:

  • Automatic Data Processing Inc. (NASDAQ: ADP) pays a dividend of US$ 1.04.
  • Republic Services Inc. has a market cap of US$ 45.6 billion.
  • Paychex, Inc. (NASDAQ: PAYX) posted Q4 2022 revenue of US$ 1129.6 million. 

The US service sector recorded rapid growth in August in four months, according to data from the Institute for Supply Management. Business activities and new orders grew to their highest in the year, the data revealed on Tuesday, September 6. Export orders also saw a spurt in nearly a year.

The report also showed that 14 services sectors posted growth last month. It was led by mining, rental & leasing, real estate, utilities, and construction.

Some of the service sector stocks include Automatic Data Processing Inc. (NASDAQ: ADP), Republic Services, Inc. (NYSE: RSG), Paychex, Inc. (NASDAQ: PAYX), etc.

Amid all these developments, we are exploring five US service sector stocks curated by Kalkine Media® and looking at their performances:

Automatic Data Processing Inc. (NASDAQ: ADP)

Automatic Data Processing, Inc. is a US human resources company that provides management software and services to clients from micro to global firms. It also provides payroll services, HR services, insurance services, and retirement services.

Automatic Data Processing is a US$ 99 billion market valuation company that paid a quarterly dividend of US$ 1.04.

The ADP stock tumbled 2.4 per cent year-to-date (YTD). ADP announced its fourth-quarter financial results for fiscal 2022 on July 27, 2022. For the quarter that ended June 30, 2022, the company posted net earnings of US$ 2,948.9 million, compared to US$ 2,598.5 million in the year-ago quarter. It was an increase of 13 per cent year-over-year.

Its diluted earnings per share (EPS) was US$ 7 in Q4 2022 versus US$ 6.07 in Q4 2021, a growth of 15 per cent YoY.

Republic Services, Inc. (NYSE: RSG)

Republic Services is a US waste disposal company that collects non-hazardous solid waste, waste transfer, recycling, and energy services.

The US$ 45.6 billion market cap company is also the second largest waste disposal company in the US after Waste Management Corporation. Republic Services distributes a quarterly dividend of US$ 0.495, next payable on October 14, 2022.

Its P/E (price to earnings) ratio is 32.99. The RSG stock jumped over four per cent YTD. On a YoY basis, the stock gained close to 16 per cent.

Its last closing price was US$ 144.05, up 0.88 per cent with a share volume of 1,222,053 on September 6, 2022.

As per Refinitiv, RSG stock’s Relative Strength Index (RSI) value was 54.95, which could mean it is in the neutral zone.

Republic Services reported a Q2 2022 revenue growth of 21 per cent. Its second-quarter 2022 net income was US$ 371.9 million. It also raised its full-year 2022 guidance for adjusted diluted EPS to US$ 4.77 to US$ 4.8.

Automatic Data Processing Inc. (NASDAQ: ADP) NET EARNINGS, Diluted EPSSource: ©Kalkine Media®; © Canva via Canva.com

Paychex, Inc. (NASDAQ: PAYX)

Rochester, New York-based Paychex, Inc. provides human resource services to clients, payroll, and benefits outsourcing services. Its clients include small- to medium-sized businesses.

It runs more than 100 offices in the US and Europe, catering to approximately 670,000 payroll clients. Paychex’s market cap is US$ 43.9 billion, and its P/E ratio is 31.67.

The company distributed a dividend of US$ 0.79 on a quarterly basis. The PAYX stock surged over eight per cent YoY. Its last closing price on September 6, 2022, was US$ 121.61, up 0.59 per cent with a share volume of 1,352,378.

For its fourth quarter of fiscal 2022, Paychex posted a robust double-digit service revenue and diluted EPS growth. Its Q4 2022 revenue was US$ 1,129.6 million, compared to US$ 1,014.7 million in the same quarter a year ago. The operating income of the fourth quarter of 2022 was US$ 394 million versus US$ 353.8 in the year-ago quarter.

Waste Connections, Inc. (NYSE: WCN)

Waste Connections is a North American waste management services company that operates in the US and Canada. It has its headquarters in Woodbridge, Ontario. Its services include waste collection, transfer, disposal, and recycling of solid waste.

The US$ 36.4 billion company pays a quarterly dividend of US$ 0.23 per share. WNC stock rose 5.4 per cent YTD. On a year-over-year basis, shares of Waste Connections increased by 7.6 per cent.

Its last closing price on September 6, 2022, was US$ 141.30, up 0.53 per cent, with a share volume of 1,125,369.

Waste Connections’ second-quarter 2022 revenue was US$ 1.816 billion, up 18.4 per cent from US$ 1.533 billion in the same quarter last year.

Its Q2 2022 net income was US$ 224.1 million compared to US$ 177 million in the corresponding quarter a year earlier. The company also raised its full-year 2022 estimates. It increased the full year 2022 outlook to revenue of close to US$ 7.125 billion, with a net income of approximately US$ 837.5 million.

Global Payments Inc. (NYSE: GPN)

Global Payments is a US MNC in the financial technology domain. The company offers payment technology and services to clients, issuers, and consumers. Global Payments made it to the Fortune 500 company list in June 2021.

Global Payments’ market valuation is US$ 35.01 billion, and it pays a quarterly dividend of US$ 0.25, next payable on September 30, 2022.

Its P/E (price to earnings) ratio is 701.83. The GPN stock increased by over three per cent in the last six months. The share prices of Global Payments gained 1.6 per cent over the last week.

Its last closing price was US$ 126.33, up 1.84 per cent on September 6, 2022, with a share volume of 2,249,596.

Global Payments’ Q2 2022 GAAP revenues were US$ 2.28 billion versus US$ 2.14 billion in the second quarter a year ago. It posted an adjusted net revenue increase of 6.1 per cent to US$ 2.06 billion in Q2 2022, relative to US$ 1.94 billion in the year-ago quarter.

Bottom line:

Although certain sectors show growth prospects, investing during market volatility comes with a huge risk. Investors should thoroughly check the credentials and fundamentals of stocks before taking the plunge. Long-term strategies, however, are the best when the market is bearish.

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