Updated 3/5/25

Key Dividend Metrics

✅ Dividend Yield: 1.71% (Higher than its five-year average of 1.36%)
✅ Dividend Growth: Consistent increases over the years
✅ Payout Ratio: 44.84%, indicating a sustainable balance
✅ Earnings Growth: Strong 15.5% year-over-year increase supports future dividends
✅ Cash Flow Strength: Operating cash flow of $9.65 billion
✅ Low Debt: A debt-to-equity ratio of 27.06% keeps financials stable
❌ Yield vs Peers: Lower than some high-yield dividend stocks
✅ Institutional Ownership: 79.1% of shares held by institutions, a sign of confidence

Accenture plc has long been a reliable name in the consulting and professional services industry, known for its steady growth and strong financial health. While it’s not necessarily the first choice for those seeking high-yield dividend stocks, it stands out as an excellent option for investors focused on dividend growth and long-term value.

With a forward dividend yield of 1.71%, Accenture provides a moderate but stable income stream. This yield is slightly above its five-year average, suggesting that the company has been rewarding its investors consistently. More importantly, with a payout ratio of just under 45%, there’s plenty of room for continued dividend increases while still allowing the company to reinvest in its future growth.

Dividend Growth and Stability

One of the most appealing aspects of Accenture’s dividend is its consistent upward trend. Over the years, the company has shown a strong commitment to increasing its dividend payout, reflecting its financial strength and confidence in future earnings.

Currently, Accenture’s forward annual dividend rate sits at $5.92 per share, up from the trailing annual rate of $5.54. This gradual but steady growth in payouts aligns well with the company’s financial performance and reinforces its reputation as a reliable dividend stock.

The company’s payout ratio of 44.84% is particularly important. It means Accenture is striking the right balance between rewarding shareholders and maintaining the flexibility to invest in growth. A lower payout ratio like this is a positive sign, as it suggests there’s room for further dividend increases in the coming years.

Financial Strength Supporting Dividends

Accenture’s financials tell a story of stability and resilience. The company continues to generate strong revenue and profit, which is crucial for maintaining and growing dividends.

Revenue for the trailing twelve months stands at $66.36 billion, with a solid gross profit of $21.54 billion. Even more impressive is the company’s quarterly earnings growth of 15.5% year-over-year, indicating a strong upward trajectory.

Cash flow is another essential factor for dividend investors. Accenture generates $9.65 billion in operating cash flow and $8.1 billion in free cash flow. These numbers demonstrate that the company has more than enough liquidity to sustain and increase dividends, even in uncertain market conditions.

Chart Analysis

Looking at the price action of Accenture (ACN), the stock has experienced a sharp pullback after reaching a recent high near the $400 level. The price is currently sitting around $345, resting just below the shorter-term moving average (orange line) while still holding above the longer-term moving average (blue line). This suggests a potential shift in momentum, where the uptrend that had been in place for the past several months is now facing resistance.

Volume shows a pattern of increasing selling pressure, particularly in the recent decline. While volume was relatively stable during the previous months of sideways movement, there were notable spikes on red days, signaling distribution. Buyers attempted to step in at various points, but the lack of sustained follow-through suggests sellers still have control.

The Relative Strength Index (RSI) has dropped sharply from overbought conditions and is now approaching oversold territory. This indicates that the stock may be reaching a point where it could see a short-term bounce, but it also reflects weakening momentum.

Recent price action has been characterized by longer upper wicks on some of the past few candles, meaning there has been selling pressure at higher levels. This aligns with the stock failing to hold above its short-term moving average. The price is now testing an area that previously acted as support. If it holds, there could be a stabilization period; if not, a further decline toward the longer-term moving average may be on the table.

Earnings Report Summary

Accenture kicked off its fiscal year 2025 on a strong note, reporting solid revenue growth and impressive earnings. The company pulled in $17.7 billion in revenue for the first quarter, which is about 9% higher than the same time last year. In local currency terms, the increase was around 8%, showing steady demand for Accenture’s services across the board.

On the profit side, things looked even better. Operating income came in at $2.95 billion, which was a 15% jump from last year’s $2.56 billion. That pushed the company’s operating margin up to 16.7%, an improvement from the previous 15.8%. When it comes to earnings per share (EPS), Accenture delivered $3.59, a nice 16% increase from last year’s $3.10. Clearly, the company is managing costs well while still growing its top line.

Bookings, which indicate future revenue, were also strong at $18.7 billion. Of that, $9.2 billion came from consulting services, while managed services bookings hit $9.5 billion. What really stood out was the $1.2 billion in new deals related to generative AI, showing that Accenture is doubling down on this cutting-edge technology.

Looking at performance by region, North America saw the biggest growth, pulling in $8.73 billion, a 9% jump in U.S. dollars and 11% in local currency. Europe, the Middle East, and Africa (EMEA) followed with $6.41 billion, up 10% in U.S. dollars. Asia Pacific brought in $2.54 billion, growing by 6%.

Industry-wise, Health & Public Services led the way with a 13% increase in revenue, while Accenture’s Products business also had a strong showing with 12% growth. Financial Services, Communications & Technology, and Resources all posted steady, single-digit increases.

Accenture continued rewarding its shareholders, handing out $926 million in dividends and spending another $898 million on share buybacks. The quarterly dividend was raised to $1.48 per share, up 15% from last year, showing confidence in the company’s financial health.

Looking ahead, Accenture expects revenue for the second quarter to land between $16.2 billion and $16.8 billion, which would represent 5% to 9% growth. For the full fiscal year, the company is projecting earnings per share between $12.43 and $12.79.

With strong growth across its business segments and a big push into AI-driven services, Accenture is positioning itself well for continued success in the months ahead.

Analyst Ratings

Accenture plc (ACN) has recently been the subject of various analyst evaluations, reflecting both upgrades and downgrades, accompanied by revised price targets. The consensus among analysts places the average price target for ACN at approximately $398.29, with projections ranging from a high of $455.00 to a low of $355.00.

Upgrades:

• UBS: On December 20, 2024, UBS analysts maintained a favorable outlook on Accenture, setting a high price target of $455.00. This optimistic stance suggests confidence in Accenture’s market position and future performance.
• Wolfe Research: In a report dated January 8, 2025, Wolfe Research upgraded Accenture from a “peer perform” rating to an “outperform” rating, establishing a price target of $425.00. This upgrade indicates an expectation of Accenture outperforming its industry peers, potentially due to strong financial metrics or strategic initiatives.

Downgrades:

• Stifel Nicolaus: On February 26, 2025, Stifel Nicolaus adjusted its rating on Accenture, lowering the price target from $390.00 to $380.00. This revision reflects a more cautious outlook, possibly due to concerns about market conditions or company-specific factors.
• Morgan Stanley: On January 31, 2025, Morgan Stanley revised its rating for Accenture, increasing the price target from $335.00 to $380.00 while assigning an “equal weight” rating. This suggests a neutral stance, indicating that the firm’s performance is expected to be in line with the overall market.
• Robert W. Baird: In a report from December 3, 2024, Robert W. Baird maintained a “neutral” rating for Accenture with a price target of $370.00. This reflects a balanced view, acknowledging both potential opportunities and risks associated with the company’s prospects.

These varied analyst perspectives highlight the dynamic nature of market evaluations, influenced by factors such as company performance, industry trends, and broader economic indicators.

Balance Sheet and Debt Considerations

A company’s ability to pay dividends isn’t just about earnings—it’s also about financial stability. Accenture maintains a healthy balance sheet, which adds an extra layer of security for dividend investors.

With total cash holdings of $8.31 billion and total debt at $8.15 billion, Accenture is in a strong financial position. The company’s debt-to-equity ratio of 27.06% is relatively low, meaning it isn’t overleveraged. This financial discipline ensures that the company can continue to prioritize shareholder returns without taking on unnecessary risk.

Valuation and Dividend Yield Comparison

Accenture’s dividend yield of 1.71% is decent but falls below the average yield of some high-yield dividend stocks. However, it’s important to consider the company’s growth potential and overall financial health rather than just focusing on the yield alone.

When looking at valuation, Accenture’s trailing price-to-earnings ratio is around 28.98, while its forward P/E stands at 27.25. While these numbers indicate that the stock is trading at a premium compared to some peers, it also reflects the market’s confidence in its long-term earnings potential.

Compared to industry averages, Accenture trades at a higher price-to-sales ratio of 3.31 and a price-to-book ratio of 7.41. While these numbers suggest that the stock may be slightly overvalued, it’s important to remember that premium companies often command higher valuations due to their consistency and strong fundamentals.

Dividend Safety and Future Outlook

For dividend investors, one of the biggest concerns is whether a company can maintain its payouts during economic downturns. Accenture appears to be in a strong position to continue rewarding shareholders well into the future.

The company’s ability to grow earnings consistently is a major advantage. With revenue and profits steadily rising, there’s a solid foundation for further dividend increases. The current payout ratio remains low enough to provide flexibility while still delivering meaningful returns to shareholders.

Another factor to consider is Accenture’s financial discipline. With relatively low debt levels and a strong cash position, the company is well-insulated from economic uncertainties. Its institutional ownership of 79.1% also suggests that large investors have confidence in its long-term potential.

Potential Risks

While Accenture is a strong dividend growth stock, it’s not without risks.

One potential downside is that its dividend yield, while growing, remains lower than some other income-focused stocks. Investors seeking higher immediate income might find better options elsewhere.

The stock also trades at a premium valuation, meaning short-term price fluctuations are possible. If market sentiment shifts or if Accenture’s growth slows, the stock could face some downside pressure.

Additionally, as a consulting and technology services firm, Accenture’s revenue is tied to corporate spending. If businesses cut back on consulting expenses during an economic slowdown, it could impact the company’s earnings. However, its diversified client base and strong industry positioning should help mitigate this risk.

Final Thoughts on Accenture for Dividend Investors

Accenture may not be a high-yield stock, but it offers something just as valuable—stability and steady growth. Its consistent dividend increases, strong financial position, and disciplined approach to cash flow management make it a solid choice for long-term dividend investors.

While the current yield might not be the highest available, Accenture’s ability to generate strong earnings and free cash flow suggests that future dividend growth is likely. For investors looking for a stock with a reliable payout, strong fundamentals, and long-term upside, Accenture remains a strong contender in the dividend investing space.