ManpowerGroup (MAN) — leading global staffing firm — beat analysts’ top- and bottom-line estimates in the second quarter, observes John Buckingham, money manager, value investing expert and editor of The Prudent Speculator.

The company earned $2.02 in the period (versus the $1.42 est.) on $5.3 billion of revenue, a 41% increase over the amount generated in a much more challenging environment a year ago.

Of its geographical segments, Southern Europe (MAN’s largest territory, commanding 46% of revenue) showed the biggest improvement on an absolute basis in operating profit, particularly in France, which recovered from a loss of $2.5 million a year ago to show earnings of $65.7 million in the latest quarter.

Also, management purchased 432,000 shares of stock in the quarter for $50 million, bumping year-to-date purchases to 1.5 million shares for $150 million (about $100 per share).

As of June 30, 1.9 million shares remain available for repurchase under the 6 million share program approved in August 2019. Including a favorable currency impact of 4 cents, management expects Q3 earnings per share between $1.86 and $1.94.

Unsurprisingly (to us), Manpower continues to bounce back from the pandemic in a similar fashion that it has from the many other crises encountered throughout its 70-plus history.

And although financial results haven’t quite reached pre-pandemic levels, management’s efforts to maintain solid financial footing through building cash and expense management ought to allow it to go on offense as the world reopens and employment needs expand.

Owing to its flexible operating structure, we note that management has repurchased over a third of outstanding shares since 2014 and has raised its dividend 11 consecutive years.

The shares have rallied nearly 25% YTD but are still attractively priced given respective EPS estimates of $7.01, $8.41 and $9.99 this year, next year and in 2023. The next dividend payment, which is made twice per year, is expected in December and the yield is 2.2%. Our Target Price has been raised to $144.

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