Company Is Both Helpful and Successful

If its one company I’ve always liked, its Providence Service Corp. (NASDAQ/PRSC). Long-time readers of this column know this.

It is actually quite rare nowadays to come across a company that’s in the business of helping people directly. Providence Service has been doing this for quite a while, with 527 government contracts to provide home- and community-based social services.

The company is successful at helping people in need, and is also successful as a business and on the stock market.

The stock went public in the third quarter of 2003 at $12 per share. Now it trades for over $33 per share. I like that. The stock didn’t move in a straight line, just methodically on good financial growth, and the fact that the company has recurring revenues.

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I’ve always contended that it is wise for an investor to own say one stock in their portfolio that generates a lot of business from government contracts. In the case of Providence Service, the company has perfected its business plan to keep everyone happy.

Government customers are happy with the company’s track record of helping disadvantaged people, stockholders are happy at the company’s financial growth, and hopefully the individuals receiving the company’s social services are happy with their treatment.

So far, in this particular case, everyone is winning. The company recently announced that it won a new contract for $2.2 million from Orange County, California. This was the first contract awarded from California’s recent Proposition 63 legislation, which levies a 1% tax on incomes over $1.0 million, to help those with mental health problems.

I love stocks that slowly tick higher. Sure, like any stock, they are susceptible to the broader market’s movements. But, I love to see a company that boasts a track record of success on all fronts.

Although they are rare, companies that serve government customers can be successful investments. Providence Service has proven that it can provide a good service at a reasonable price, and make a reasonable profit in doing so.

Like I’ve said before, you usually can’t go wrong being in the business of helping people.