The Dividend Mailbox® ACN Deep Dive: AI Isn’t Killing Consulting, It’s Reinventing It
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Dividend investing isn’t about settling for slow growth. To grow your income, you need to own growing companies, and the real wins come when you find them at a discount. The trick is seeing past the headlines and recognizing value even in businesses the market assumes are at risk of disruption.
In this milestone 50th episode, Greg kicks things off with a Wall Street Journal investor quiz that highlights the timeless power of compounding. From there, the focus shifts to Accenture ($ACN), the world’s largest consulting firm. Despite short-term headwinds from government budget cuts and fears of AI disruption, Accenture’s strong balance sheet, growing dividend, and unique position in the consulting landscape make it a compelling candidate for long-term dividend growth investors. Greg breaks down the numbers, the risks, and the upside scenario if Accenture turns AI into an accelerant for its business model.
Topics Covered:
03:13 – The century-long compounding lesson: Coca-Cola, Nvidia, Altria, and Apple
05:15 – Berkshire Hathaway’s glitch and 60 years of outperformance
07:26 – Introducing Accenture ($ACN): A long-held but renewed idea
08:48 – Why the stock has fallen from $400 to the mid-$200s
10:39 – AI disruption fears: risk or opportunity?
11:33 – Morningstar and Value Line’s perspectives on Accenture
14:34 – Historical dividend, earnings, and revenue track record
16:25 – Margins, balance sheet strength, and net debt position
19:03 – Return on invested capital: consistent discipline over decades
20:08 – Acquisition strategy: why Accenture has succeeded where others fail
21:59 – Conservative debt issuance and bond market confidence
24:56 – Profitability metrics: margins remain steady through cycles
26:14 – Accounts receivable and customer credit strength
27:41 – Why the federal contract risk looks like a buying opportunity
28:10 – The 10-year dividend model and forward growth scenarios
30:01 – Potential upside if AI becomes a growth driver
31:45 – Valuation: PE, price-to-sales, and free cash flow yield at decade lows
32:48 – Risks: client concentration, acquisitions, regulation, and AI disruption
34:04 – Final thoughts
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