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This prompted analysts to revise their estimates higher for both 2012 and 2013, sending the stock to a Zacks #2 Rank (Buy).
In addition, IDEX recently increased its dividend by 18%. It currently yields 1.8%.
IDEX Corp manufactures a broad range of fluid handling and industrial products. Sales for the first quarter of 2012 were divided as follows:
Fluid & Metering Technologies: 44%
Health & Science Technologies: 35%
Fire & Safety/Diversified Products: 21%
The company was founded in 1987 and is headquartered in Lake Forest, Illinois. It has a market cap of $3.6 billion.
First Quarter Results
IDEX delivered stellar results for the first quarter of 2012. Earnings per share came in at 66 cents, beating the Zacks Consensus Estimate by 2 cents. It was a 16% increase over the same quarter last year.
Sales rose 15% year-over-year to a record $489.4 million, well ahead of the Zacks Consensus Estimate of $481.0 million. This was driven in large part by acquisitions, but organic growth was a solid 6%.
Organic growth was up in each segment, including 8% in Fluid & Metering and 7% in Fire & Safety/Diversified Products.
Operating income increased 15% year-over-year as the operating margin improved slightly from 18.2% to 18.3% of sales.
Following strong first quarter results, management increased its guidance for the remainder of the year. The company now expects EPS of $2.80-$2.85 on mid-single digit organic revenue growth.
This prompted analysts to revise their estimates higher, sending the stock to a Zacks #2 Rank (Buy).
The Zacks Consensus Estimate for 2012 is now $2.82, within guidance, and representing 10% growth over 2011 EPS. The 2013 consensus estimate is currently $3.16, corresponding with 12% growth.
IDEX also recently announced an 18% increase in its quarterly dividend. Since 2000, the company has increased its dividend at a compound annual rate of 10%:
It currently yields a solid 1.8%.
The valuation picture looks very reasonable for IEX. Shares trade at 14.8x 12-month forward earnings, a discount to its 10-year median of 17.2x.
Its PEG ratio is 1.0 based on a consensus long-term EPS growth rate of 15.0%.
The Bottom Line
With rising estimates, strong growth projections, a solid 1.8% yield, and reasonable valuation, IDEX offers investors attractive upside potential.
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