Published on 17 Nov 2021 on Zacks via Yahoo Finance
The Business Services sector, despite the coronavirus-induced market uncertainty, has been steadily gathering steam on the back of gradual resumption of business activities, increased adoption and success of the work-from-home model, rise in demand for risk mitigation and consulting services, and expertise in improving operational efficiency and reducing costs. Providers of essential and non-deferrable services, such as waste removal and building maintenance, remained resilient to the pandemic-induced disruptions.
Owing to its widely-diversified nature, the sector seeks to benefit from the growth of the overall economy, which is expected to strengthen further on the success of the ongoing mass vaccination program, continued government response in the form of pandemic-relief packages, expanded unemployment benefits and relaxation of restrictions.
In view of the aforementioned favorable trends, several business services firms such as Charles River Associates CRAI, Automatic Data Processing, Inc. ADP andWaste Connections, Inc. WCN have chosen to reward their shareholders with dividend hikes. We believe consistency in rewarding shareholders through dividend payments or share repurchases not only boost investor confidence but also positively impact a company’s earnings per share.