CRA International, Inc. that conducts business as Charles River Associates CRAI has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of its growth.
The company has an expected long-term earnings per share (three to five years) growth rate of 13%.
Factors That Bode Well
We believe that Charles River’s international operations helped expand its geographic footprint and contribute significantly to the top line. A global network of coordinated operation helps it enhance its knowledge base and areas of functional expertise. The company recently recorded the highest second-quarter revenues in its history. Revenues of $123 million increased 11.3% year over year in the quarter. It registered double-digit year-over-year revenue growth in Finance, Forensic Service and Life Sciences practices. Charles River’s professional team has helped it achieve and maintain a solid reputation of providing high-quality consulting services. Almost three fourths of the company’s senior consultants are highly educated, having doctorate or other advanced degrees, and are recognized experts in their respective fields. The company also works with a select group of non-employee experts belonging to top educational institutes to better serve clients.
Charles River Associates Revenue (TTM)
Charles River Associates revenue-ttm | Charles River Associates Quote
Although many companies across diverse sectors have suspended dividend pay outs amid the coronavirus crisis, Charles River is one of those few firms that are sailing through the tough economic time and maintaining dividend payouts as well. The company announced a quarterly cash dividend of 23 cents in April and July.
Charles River has a track record of consistent dividend payment. During 2019, the company paid cash dividends of $63.9 million. In 2019, 2018 and 2017, the company paid out dividends worth $6.54 million, $5.78 million and $4.94 million, respectively.
At the end of second-quarter 2020, Charles River’s debt-to-capital ratio of 0.51 was higher than the industry’s 0.20. High debt to capitalization ratio indicates that the proportion of debt to finance the company’s assets is on the rise and so is the risk of insolvency.
Further, cash and cash equivalent balance of $19 million at the end of the quarter was well below the long-term debt level of $143 million, underscoring that the company doesn’t have enough cash to clear its debt burden.
Zacks Rank and Stocks to Consider
Charles River currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are FactSet Research Systems Inc. FDS, ICF International, Inc. ICFI and IQVIA Holdings Inc. IQV. All the three stocks carry a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings (three to five years) growth rate for FactSet, ICF International and IQVIA Holdings is estimated at 8.5%, 10% and 9.8%, respectively.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.