IQVIA Holdings Inc. IQV is gaining from a massive addressable market, providing it with the opportunity to expand. An expansive database makes the company stand out from the herd and bars new entrants. However, no plan to pay dividends is often a red flag for dividend-seeking investors. A weak liquidity position adds to the concern.

IQV reported impressive fourth-quarter 2024 results. Adjusted earnings were $3.12 per share, outpacing the Zacks Consensus Estimate marginally and rising 9.9% on a year-over-year basis. Total revenues of $4 billion surpassed the consensus estimate by a slight margin and grew 2.3% from the year-ago quarter.

How is IQVIA Doing?

The company’s addressable market size surpassed the $330-billion mark and consists of outsourced research and development, real-world evidence and connected health, and technology-enabled clinical and commercial operations markets. The company aspires to expand and penetrate these markets by innovating and upgrading its offerings using its data, advanced analytics, transformative technology, and domain expertise.

IQV’s arsenal of information is its distinguishing asset and a big hindrance to entry for competitors. IQVIA’s information set contains around 61 petabytes of proprietary data sourced from nearly 150,000 data suppliers and covers more than one million data feeds globally. These data consist of healthcare information that encompasses more than one billion comprehensive, longitudinal, non-identified patient records across sales, prescription and promotional data, electronic medical records, medical claims, genomics, and social media.

The company has a strong healthcare-specific global IT infrastructure, analytics-driven clinical development capabilities, a strong real-world solutions ecosystem, and an increasing set of proprietary clinical and commercial applications that assist it in growing and retaining relationships with healthcare stakeholders. The infrastructure enables the company to manage data efficiently, conduct real-time analytics, and generate scalable solutions to drive innovation and boost patient outcomes across the globe.

A combination of offerings of research and development, and commercial services develops trusted relationships, garnering a diversified base of more than 10,000 clients, including pharmaceutical and biotech companies, healthcare providers, payers, government agencies, academic institutions, and contract research organizations, across 100 countries. Clients utilize IQVIA’s research and analytical prowess, and technological capabilities to optimize drug development, enhance healthcare delivery, and drive commercialization efforts.

However, the company currently has no plan to pay cash dividends on common stock. Payment of dividends in the future depends on factors like financial condition, cash requirements and contractual restrictions. This discourages dividend-seeking investors from dipping their hands in the stock.

IQVIA’s current ratio (a measure of liquidity) at the end of fourth-quarter 2024 was pegged at 0.84, lower than the industry’s 1.93. Despite a 3.7% rise from the preceding quarter, a current ratio of less than 1 often indicates that a company may have problems paying off its short-term obligations.

Image Source: Zacks Investment Research

IQV’s Zacks Rank & Stocks to Consider

IQVIA carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the broader Zacks Business Services sector are AppLovin Corporation APP and ABM ABM.

AppLovin currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

APP has a long-term earnings growth expectation of 20%. It delivered a trailing four-quarter earnings surprise of 23.5%, on average.

ABM currently has a Zacks Rank of 2 (Buy) and expects long-term earnings growth of 5.2%.

ABM delivered a trailing four-quarter earnings surprise of 11.6%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ABM Industries Incorporated (ABM) : Free Stock Analysis Report

AppLovin Corporation (APP) : Free Stock Analysis Report

IQVIA Holdings Inc. (IQV) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research