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Shares of Dover Corporation (DOV - Analyst Report) hit a new 52-week high of $81.39 on Thursday, Jul 11; above its previous high of $80.75. The new high was supported by a solid outlook for the second quarter, results of which is scheduled to be announced on July 18, benefits from the company’s decision to spin off certain part of its communication technologies businesses, active acquisition pipeline, and bookings and orders growth.

Dover has delivered a robust one-year return of about 60.37% and year-to-date return of about 24.93%, outperforming the S&P 500. Average volume of shares traded over the last three months was approximately 1.16 million.

This industrial conglomerate that produces a wide range of specialized industrial products and manufacturing equipment has been delivering positive earnings surprises over the past four quarters with an average surprise of 1.74%. This Zacks Rank #3 (Hold) stock has a market cap of $13.9 billion and a long-term expected earnings growth rate of 12.5%.

Dover’s Strengths

Dover’s expansion has been mainly driven by acquisitions. The company remains committed to its target of achieving annual organic sales growth of 4% to 6% in the next three years, aided by acquisition growth of 3% to 5%. In 2012, Dover made significant addition to its artificial lift portfolio (Production Control Services) and to the Fluid Solutions platform (Maag Pump Systems) and refrigeration (Anthony International). The company expects the completed acquisitions to be accretive to its 2013 earnings by 13 cents to 16 cents, largely driven by Anthony.

Dover’s decision to spin off certain parts of its communication technologies businesses into a standalone, publicly-traded company – Knowles, will simplify its business profile and enable it to focus on its key growth spaces - Energy, Fluids, Refrigeration & Food Equipment and Printing & Identification. Following the spin-off, Dover's revenues in 2013 on a pro-forma basis is estimated at around $7.4 to $7.6 billion.

Strong 1Q13 Earnings and Outlook

Dover’s first-quarter 2013 adjusted earnings per share increased 9% to $1.10. The rise was driven by a 6% contribution from acquisitions, offset by organic decline of 1% as well as minor impact from foreign exchange.

Dover's total bookings increased 7% year over year to $2.2 billion in the quarter, driven by growth in Engineered Systems, Communication Technologies and Energy segment bookings. Orders increased 1.4% from the year-ago quarter and 12.4% sequentially. We expect the book to bill ratio of 1.09x to boost organic growth in the second quarter.

For 2013, Dover expects to achieve full year organic growth of 3% to 5%, complemented by acquisition growth of 4%, resulting in total revenue growth of 7% to 9%. Earnings per share is expected to lie in the range of $5.05 - $5.35. The Zacks Consensus Estimate for 2013 is currently pegged at $5.23 per share, reflecting a 17.9% year-over-year increase and within the company’s guidance.

Other Stocks to Consider

Other stocks in the sector that are currently performing well and have a good visibility include  Kawasaki Heavy Industries Ltd. , with a Zacks Rank #1 (Strong Buy), while Chart Industries Inc. (GTLS - Snapshot Report) and Gardner Denver Inc. , both carrying a Zacks Rank #2 (Buy), are also good options.

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