ManpowerGroup MAN is gaining from investments that improve its global technology infrastructure. Its shareholder-friendly policies are attractive to investors. However, the company has not experienced a meaningful recovery in 2024. High competition is an added concern.

MAN reported mixed fourth-quarter 2024 results. Quarterly adjusted EPS came in at $1.02, which surpassed the Zacks Consensus Estimate by 3% and increased 1.5% year over year. Revenues of $4.4 billion missed the consensus mark by a slight margin and decreased 5% from the year-ago quarter.

How is ManpowerGroup Faring?

ManpowerGroup operates like a comprehensive workforce solution partner, helping businesses find, develop and manage talent via recruitment, training, outsourcing and consulting services. MAN’s business diversification and geographical reach assist it in mitigating concentration risks, thereby creating a steady revenue channel.

The company is making significant investments in technology to increase productivity and efficiency, as well as executing strong pricing and disciplined cost management. It has implemented front office systems, cloud-based and mobile applications, and enhanced its global technology infrastructure across several markets. ManpowerGroup’s primary motive is to keep investing in the digitalization of its workforce solutions.

MAN's commitment to shareholder returns positions it as a reliable long-term wealth compounder for investors. The company returned $210 million, $270 million, $179.8 million and $140 million through share repurchases in 2021, 2022, 2023 and 2024, respectively. Also, dividend payments of $139.9 million, $136.6 million, $144.3 million and $145.8 million over the same period have been encouraging dividend-seeking investors.

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With higher chances of the Fed likely to cut interest rates and the European Central Bank already easing rates, the economy is anticipated to experience growth. This could lead to increased hiring, bolstering ManpowerGroup's income to an extent and maintaining a steady cash flow to support stable dividend payouts.

Meanwhile, in 2024, the company did not witness a meaningful recovery. European and North American sides of ManpowerGroup’s business remained bleak, as companies have been reluctant to hire amid a sluggish macroeconomic environment.

The uncertain political climate prevailing in France is likely to pressure hiring activities. These challenges are reflected in ManpowerGroup's financials, with organic revenue still declining and improvement seeming blurry in staffing demand.

MAN experiences fierce competition within the employment services industry, with limited entry barriers and several players. These players have the marketing and financial resources to position them well in the market. The company is anticipated to face pricing pressure from competitors and an increasing trend of clients developing in-house workforce resources. The biggest burden could be AI tools that enable clients to use advanced automation capabilities to replace the services provided by the company.

Zacks Rank & Stocks to Consider

MAN has a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the broader Zacks Business Services sector are Limbach Holdings, Inc. LMB and PagSeguro Digital PAGS.

Limbach Holdings sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LMB has a long-term earnings growth expectation of 12%. It delivered a trailing four-quarter earnings surprise of 42.3%, on average.

PagSeguro Digital currently flaunts a Zacks Rank of 1.

PAGS has a long-term earnings growth expectation of 13.6%. It delivered a trailing four-quarter earnings surprise of 9.3% on average.

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ManpowerGroup Inc. (MAN) : Free Stock Analysis Report

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

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