ABM Industries: Boring Business, High-Tech Polish

ABM Industries remains attractively valued at ~11x forward earnings, with a compelling margin of safety despite a 20% total return since the last review. ABM demonstrates healthy mid-single-digit revenue growth, driven by strong performance in Data Centers, Semiconductors, and M&A, with new segments now 11% of revenue. Margin expansion opportunities exist through operational efficiencies, M&A integration, and technology adoption, though low EBITDA margins highlight industry challenges and competitive pricing risks. With an 8% shareholder yield (5.8% buyback, 2.2% dividend) and double-digit total return potential, I remain optimistic on ABM’s long-term compounding prospects.

My thesis on ABM Industries (ABM), which I wrote almost a year ago, was mainly based on the fact that this was a boring business, but a potential compounder that