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Investors looking to capitalize on growing work force needs and a changing pension landscape are snapping up shares of human resources consultant Morneau Shepell Inc.

Shares of the Toronto-based company, Canada's largest administrator of retirement and benefits plans, are trading near all-time highs amid a steady increase in revenue and profit.

While many analysts are now recommending investors take a breather, given the stock's recent rise, they're still positive on the company's long-term health and its attractive 4.5-per-cent dividend yield.

"I think people look at it as a very steady stock with some potential for upside from both acquisitions and organic growth," said CIBC World Markets analyst Stephanie Price. She has a "sector performer" rating on the stock, equivalent to a "hold," but recently increased her price target to $17.50 from $16.

Among six analysts who cover the stock, five have a "hold" recommendation and one a "buy," according to S&P Capital IQ. A handful of analysts have recently increased their price targets as the stock gains increased investor attention.

Just over half of Morneau Shepell's revenue comes from pension and benefit consulting and the rest from administering employee assistance programs, such as counselling and occupational health services.

Continuing pension reforms across Canada are poised to benefit the company; as pensions get more complex, more companies are relying on providers such as Morneau to design, develop and administer the plans. It is also expanding into the larger U.S. market, which accounted for about 6.5 per cent of revenue in 2013, up from 5.5 per cent in 2012.

Risks for Morneau include growing competition for employee pension and benefit services across North America, as well as its high debt levels, analysts say. GMP Securities analyst Stephen Boland recently downgraded the stock to "hold," but increased his target to $17 from $16.50. "Our outlook … has not changed," he said in a note, citing the company's "unique product line-up that produces steady recurring revenue growth."

Mr. Boland said the downgrade was because he didn't see a near-term event that would give the stock a boost.

The company is expected to continue making small acquisitions similar to its March purchase of Groupe AST, the largest workers' compensation provider in Quebec, from ADP Canada Co. It has made 13 other acquisitions between 1992 and 2013, but its growth has mostly been through existing operations.

Scotia Capital analyst Phil Hardie has a "sector perform" on the stock, but increased his target to $17 from $16 after Morneau reported first-quarter earnings in mid-May that were above expectations. "[The] results were supportive of our belief that high levels of recurring revenue, relatively stable margins, low capital investment requirements, and attractive yield continue to be key reasons to like this story," Mr. Hardie said in a note.

TD Securities analyst Graham Ryding increased his target to $18 from $16.50, while still maintaining a "hold." "We remain constructive on Morneau's outlook," he said in a note, but said further growth in the share price "may be somewhat limited."

The analyst consensus price target for Morneau shares over the next year is $17.25. That is slightly above its record $17.20 reached on the Toronto Stock Exchange on May 26, which was up 35 per cent from its 52-week low of $12.74 in August.

While the stock may be seen as expensive, National Bank Financial analyst Trevor Johnson has a "buy" on it, believing the company has strong, steady growth potential. "In the diversified space, investors are paying up for quality assets with good visibility and defensive cash flows," Mr. Johnson said. "It's more of a flight to quality and stability, which is why we see more upside with this one."

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