Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, defense contractor ManTech (NAS: MANT) has earned a respected four-star ranking.
With that in mind, let's take a closer look at ManTech's business and see what CAPS investors are saying about the stock right now.
Fairfax, Va. (1968)
Security software and services
Co-Founder/Chairman/CEO George Pedersen
CFO Kevin Phillips
Return on Equity (Average, Past 3 Years)
$207 million / $200 million
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
Earlier this week, robertshrestha listed several of ManTech's positives: "Beaten down big time, small defense player with room to grow, healthy balance sheet, decent dividend, nicely positioned portfolio."
In fact, ManTech currently sports a particularly paltry price-to-cash flow of 2.9. That represents a clear discount to much larger defense contractors like Boeing (NYS: BA) (12.3), General Dynamics (NYS: GD) (6.3), and Lockheed Martin (NYS: LMT) (8.0).
CAPS member MagicDiligence elaborated on the bull case on Aug. 31:
When reviewing ManTech, it was striking to me that its portfolio of services are exactly where nearly all of the big 5 are trying to expand into. ...
The financial picture is also a positive. ManTech's balance sheet is minimally levered, with just a 19% debt-to-equity ratio (anything under 50% is great), and operating earnings covering interest 15 times over. The company this year just started paying a dividend that yields 2.3%, and represents less than 20% of free cash flow. With a stable business and steady cash flows, the dividend is well supported and has room to grow. ...
In all, like pretty much all the defense contractors, ManTech looks oversold. Even assuming well below historic 3% growth rates going forward (trailing 5-year growth rate is 15%), and below historic P/E and P/S (price-to-sales) multiples, ManTech looks worth $60 to me -- a massive discount to current sub-$40 share prices.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of General Dynamics and Lockheed Martin. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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