雅虎香港財經 Here's Why Hold Strategy is Apt for IDEX (IEX) Stock Now
IDEX Corporation IEX has been benefiting from strong momentum in the Fire & Safety/Diversified Products (FSDP) segment and accretive acquisitions despite weakness in the Health & Science Technologies (HST) unit, the rising cost of sales and forex woes.
Let us discuss the factors why investors should retain the stock for the time being.
Growth Catalysts
Business Strength: IDEX is benefiting from the strong performance of the FSDP segment, driven by increasing orders from industrial and municipal markets. The company's focus on reducing excess inventory and improving overall productivity has been proving beneficial for the segment. Strong demand for products in the fire and safety and Band-It businesses is driving the FSDP segment’s revenues. Also, dispensing project wins in emerging markets have been a tailwind.
Accretive Acquisition: IDEX solidifies its product portfolio and leverages business opportunities through asset additions. In December 2023, the company acquired advanced material science solutions provider, STC Material Solutions, which expanded IEX’s expertise in material sciences and offered significant opportunities to collaborate with other IDEX-critical components businesses on comprehensive solution sets for customers. This acquisition augmented the company’s HST segment.
The acquisition of Iridian Spectral (May 2023) expanded IDEX’s array of optical technology offerings, thus augmenting its HST segment. Its November 2022 acquisition of Muon Group, which was also incorporated within the HST segment, further expanded its precision technology offerings. Commercial synergy potential from the combined entities is expected to boost offerings for new and existing customers. Notably, acquired assets boosted the company’s sales by 1% in the first quarter. The company anticipates buyout synergies to boost sales by approximately 1% in 2024.
Rewards to Shareholders: The company believes in rewarding its shareholders handsomely through dividend payments and share buybacks. In the first three months of 2024, IDEX’s dividend payments totaled $48.5 million (up 6.6% year over year). The current quarterly dividend rate is 69 cents per share (a hike of 7.8% was announced in May 2024). In 2023, the company distributed dividends of $190.7 million.
In light of the above-mentioned positives, we believe, investors should retain IEX stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past year, the stock has increased 9.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below.
Belden Inc. BDC presently carries a Zacks Rank #2 (Buy) and has a trailing four-quarter earnings surprise of 14.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for BDC’s 2024 earnings has increased 8.3% in the past 60 days. Shares of Belden have risen 11.6% in the past year.
Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 8.2%.
The consensus estimate for AIT’s fiscal 2024 earnings has improved 1.2% in the past 60 days. The stock has risen 54.4% in the past year.
Greif, Inc. GEF presently carries a Zacks Rank of 2. GEF delivered a trailing four-quarter earnings surprise of 150.6%, on average.
The Zacks Consensus Estimate for GEF’s fiscal 2024 earnings has increased 9% in the past 60 days. Its shares have risen 2% in the past year.
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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Belden Inc (BDC) : Free Stock Analysis Report
IDEX Corporation (IEX) : Free Stock Analysis Report
Greif, Inc. (GEF) : Free Stock Analysis Report
