We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Industrial Stocks Likely to Beat Q1 Earnings Estimates
Read MoreHide Full Article
A number of domestic and international drivers, the newly formed government in the U.S., policies of the Federal Reserve, energy price volatility, forex woes and economic unrest in international arena are impacting market sentiments in the country.
Year to date, the S&P 500 index recorded 6.07% gain largely driven by the government’s intention of increasing infrastructural investments and other growth policies. We believe that such decisions will support growth for companies in the industrial sector.
Year to date, the Zacks categorized Industrial Products industry gained 8.46%. It holds the second position in the Zacks sector ranking. Currently, the Machinery-Tools & Related Products and Thermal Products industries are among the top 1% of the total 265 Zacks categorized industries while Machinery-Material Handling and Office Supplies are among the top 6%. Going by the Zacks rule, top 50% industries of all Zacks industries outperform the bottom half by a wide margin.
Also, economic indicators, like industrial production, are pointing toward a healthy business environment for the industrial companies. In first-quarter 2017, industrial production in the U.S. grew 1.5% year over year driven by improvements in manufacturing, mining and utilities outputs. On a monthly basis, the country’s industrial production inched up 0.1% year over year in January, 0.4% in February and 1.5% in March. Also, new export orders for U.S.-manufactured machinery increased 2.9% in the first two months of 2017.
Performance So Far and Expectations for Q1
Per the Zacks Earnings Trend report dated Apr 26, roughly 45.5% of industrial products stocks (accounting for 2% of the S&P 500 index’s total market capitalization) in the S&P 500 Group reported results for the Jan–Mar 2017 quarter, recording growth of 24% in earnings and 3.2% in revenues. In the quarter, earnings and revenues of industrial products stocks are predicted to rise 19.3% and 8%, respectively.
Moreover, results of all S&P 500 companies released till Apr 26 showed 10% growth in earnings and 4.3% rise in revenues. In the quarter, earnings for the S&P 500 companies are projected to grow 9.7% and revenues are expected to rise 5.9%.
Guide to Select the Right Stock
The Industrial Products sector includes containers & glass, industrial products & services, machinery-electrical, machinery and pollution control industries.
Stocks with high investment rankings can be of interest to investors seeking exposure in the diversified sector. But it is advisable to choose stocks with a favorable Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) and a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate), as these two factors increase the probability of a stock surprising estimates in the quarter.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Below we have listed four Industrial Products stocks, with the right combination of elements to post an earnings beat for first-quarter 2017:
Eaton Corporation, PLC (ETN - Free Report) : The company, with a $34.3 billion market capitalization, is a diversified power management company and a global technology leader in electrical components and systems.
The company, with a Zacks Rank #2 and an Earnings ESP of +2.30%, seems a suitable pick for investors seeking exposure in this industry. Moreover, the stock promises solid return of 12.6% on equity and 8.5% on capital. These prospects are again supported by the company’s efforts to improve its services and build a sound customer base. Dividend yield presently stands at 3.14%.
The stock is currently valued at a forward P/E multiple of 18.1x versus 20.9x for the industry. The company’s solid return profile and estimated five year earnings growth rate of 8.8% improve its prospects.
Eaton Corporation is slated to release its results on May 2 before the market opens.
MRC Global Inc. (MRC - Free Report) : The company is one of the leading distributors of pipes, valves and fittings and related products and services to the energy industry. Currently, the company has a market capitalization of $1.8 billion.
The stock, with a Zacks Rank #3 and an Earnings ESP of +16.67%, seems a good investment option. In addition, the stock’s earnings are projected to grow nearly 15% in the next five years.
MRC Global Inc. will release its results on May 4, after the market closes.
Flowserve Corporation (FLS - Free Report) : The company, with a $6.63 billion market capitalization, is a leading manufacturer and aftermarket service provider of comprehensive flow control systems, globally.
As suggested, the industrial company is worth considering as it carries a favorable Zacks Rank #3 and an Earnings ESP of +15%. Also, the stock promises solid returns of 16.7% on equity and 8.8% on capital. Prospects are supported by the company’s efforts to diversify its sales stream, improve quality and build a sound partner network. Dividend yield currently stands at 1.49%.
The stock is currently valued at a forward P/E multiple of 23.1x versus 25.6x for the industry. Also, the company’s earnings are estimated to grow 11.7% in the next five years.
Flowserve Corporation is slated to release its results on May 1, after the market closes.
Colfax Corporation : The company is one of the leading manufacturing and engineering companies, which specializes in products and services related to gas and fluid handling, and fabrication technology. Currently, the company has a market capitalization of $5 billion.
The stock, with a Zacks Rank #3 and an Earnings ESP of +10%, seems a good investment option. In addition, the stock offers return of 6.1% on equity and 4.2% on capital. Earnings growth is estimated at roughly 10.40% for the coming five years.
Colfax Corporation will release its results on May 5, before the market opens.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
4 Industrial Stocks Likely to Beat Q1 Earnings Estimates
A number of domestic and international drivers, the newly formed government in the U.S., policies of the Federal Reserve, energy price volatility, forex woes and economic unrest in international arena are impacting market sentiments in the country.
Year to date, the S&P 500 index recorded 6.07% gain largely driven by the government’s intention of increasing infrastructural investments and other growth policies. We believe that such decisions will support growth for companies in the industrial sector.
Year to date, the Zacks categorized Industrial Products industry gained 8.46%. It holds the second position in the Zacks sector ranking. Currently, the Machinery-Tools & Related Products and Thermal Products industries are among the top 1% of the total 265 Zacks categorized industries while Machinery-Material Handling and Office Supplies are among the top 6%. Going by the Zacks rule, top 50% industries of all Zacks industries outperform the bottom half by a wide margin.
Also, economic indicators, like industrial production, are pointing toward a healthy business environment for the industrial companies. In first-quarter 2017, industrial production in the U.S. grew 1.5% year over year driven by improvements in manufacturing, mining and utilities outputs. On a monthly basis, the country’s industrial production inched up 0.1% year over year in January, 0.4% in February and 1.5% in March. Also, new export orders for U.S.-manufactured machinery increased 2.9% in the first two months of 2017.
Performance So Far and Expectations for Q1
Per the Zacks Earnings Trend report dated Apr 26, roughly 45.5% of industrial products stocks (accounting for 2% of the S&P 500 index’s total market capitalization) in the S&P 500 Group reported results for the Jan–Mar 2017 quarter, recording growth of 24% in earnings and 3.2% in revenues. In the quarter, earnings and revenues of industrial products stocks are predicted to rise 19.3% and 8%, respectively.
Moreover, results of all S&P 500 companies released till Apr 26 showed 10% growth in earnings and 4.3% rise in revenues. In the quarter, earnings for the S&P 500 companies are projected to grow 9.7% and revenues are expected to rise 5.9%.
Guide to Select the Right Stock
The Industrial Products sector includes containers & glass, industrial products & services, machinery-electrical, machinery and pollution control industries.
Stocks with high investment rankings can be of interest to investors seeking exposure in the diversified sector. But it is advisable to choose stocks with a favorable Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) and a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate), as these two factors increase the probability of a stock surprising estimates in the quarter.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Below we have listed four Industrial Products stocks, with the right combination of elements to post an earnings beat for first-quarter 2017:
Eaton Corporation, PLC (ETN - Free Report) : The company, with a $34.3 billion market capitalization, is a diversified power management company and a global technology leader in electrical components and systems.
The company, with a Zacks Rank #2 and an Earnings ESP of +2.30%, seems a suitable pick for investors seeking exposure in this industry. Moreover, the stock promises solid return of 12.6% on equity and 8.5% on capital. These prospects are again supported by the company’s efforts to improve its services and build a sound customer base. Dividend yield presently stands at 3.14%.
The stock is currently valued at a forward P/E multiple of 18.1x versus 20.9x for the industry. The company’s solid return profile and estimated five year earnings growth rate of 8.8% improve its prospects.
Eaton Corporation is slated to release its results on May 2 before the market opens.
MRC Global Inc. (MRC - Free Report) : The company is one of the leading distributors of pipes, valves and fittings and related products and services to the energy industry. Currently, the company has a market capitalization of $1.8 billion.
The stock, with a Zacks Rank #3 and an Earnings ESP of +16.67%, seems a good investment option. In addition, the stock’s earnings are projected to grow nearly 15% in the next five years.
MRC Global Inc. will release its results on May 4, after the market closes.
Flowserve Corporation (FLS - Free Report) : The company, with a $6.63 billion market capitalization, is a leading manufacturer and aftermarket service provider of comprehensive flow control systems, globally.
As suggested, the industrial company is worth considering as it carries a favorable Zacks Rank #3 and an Earnings ESP of +15%. Also, the stock promises solid returns of 16.7% on equity and 8.8% on capital. Prospects are supported by the company’s efforts to diversify its sales stream, improve quality and build a sound partner network. Dividend yield currently stands at 1.49%.
The stock is currently valued at a forward P/E multiple of 23.1x versus 25.6x for the industry. Also, the company’s earnings are estimated to grow 11.7% in the next five years.
Flowserve Corporation is slated to release its results on May 1, after the market closes.
Colfax Corporation : The company is one of the leading manufacturing and engineering companies, which specializes in products and services related to gas and fluid handling, and fabrication technology. Currently, the company has a market capitalization of $5 billion.
The stock, with a Zacks Rank #3 and an Earnings ESP of +10%, seems a good investment option. In addition, the stock offers return of 6.1% on equity and 4.2% on capital. Earnings growth is estimated at roughly 10.40% for the coming five years.
Colfax Corporation will release its results on May 5, before the market opens.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.