Here's Why You Should Add Accenture Stock to Your Portfolio

Accenture plc ACN has seen its stock rise 22% in the past three months, outperforming the industry's 14.9% growth and the 2.4% uptick in the S&P 500 composite index.

We have a Zacks Rank #2 (Buy) on ACN shares, given the company's technological prowess, strong cash position, contribution from acquisitions and consistent dividend payouts.

Technology-Based Growth Strategy

Accenture's broader growth strategy focuses on delivering comprehensive value to its stakeholders through technology. By focusing on building a digital core with cloud, data, and AI technologies and investing in talent, Accenture is well-positioned for long-term success. We believe this strategy positions Accenture as a trusted partner for its clients and keeps the stock attractive.

Strong Cash Position

Accenture had a cash and cash equivalents balance of $5.5 billion at the end of third-quarter fiscal 2024 against a total long-term debt of just $69 million. Cash provided by operating activities was $1 billion and free cash flow came in at $1 million. Accenture generates significant cash from operations and also holds a huge cash balance, management has the flexibility to pursue growth in any areas that exhibit true potential.

This flexibility and technological prowess allowed it to pursue acquisition opportunities in different markets. The company spent $2.5 billion across 25 acquisitions in fiscal 2023. A disciplined acquisition strategy helps ACN channel its business in high-growth areas, adding skills and capabilities, and deepening industry and functional expertise.

Dividend Spinner

Commitment to shareholder returns makes ACN a reliable way for investors to compound wealth over the long term. The company paid $2.8 billion, $2.5 billion and $2.2 billion in dividends in 2023, 2022, and 2021, respectively. We are expecting steady income growth, which will translate to steady cash flow, enabling it to pay out stable dividends.

Other Stocks to Consider

Investors can look at some other top-ranked stocks like AppLovin APP, Climb Global Solutions CLMB, and HNI Corporation HNI.

APP currently sports a Zacks Rank of 1 (Strong Buy). The company has a long-term earnings growth expectation of 20%. APP delivered a trailing four-quarter earnings surprise of 21.1%, on average.

Climb Global Solutions flaunts a Zacks Rank #1 at present. It has a long-term earnings growth expectation of 11%. CLMB delivered a trailing four-quarter earnings surprise of 25.2%, on average.

HNI sports a Zacks Rank #1 at present. It has a long-term earnings growth expectation of 12%. HNI delivered a trailing four-quarter earnings surprise of 51.3%, on average.

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