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Here's Why You Should Invest in STERIS (STE) Stock Right Now
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STERIS plc (STE - Free Report) has been gaining investor confidence on continued positive results. Over the past year, the company’s stock has outperformed its industry. The stock has gained 2.2% against the industry’s 10.2% fall. Also, the company has outperformed the S&P 500’s 8.1% decline.
This renowned global provider of infection prevention, decontamination, microbial reduction, and surgical and gastrointestinal support products and services has a market cap of $9.34 billion. The company has an earnings growth rate of 12.5% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
What’s Working in Favor of the Stock?
STERIS' Infection Prevention and Sterilization Wing Grows Globally
With the acquisition of U.K.-based outsourced sterilization services provider Synergy Health, STERIS has become the global leader in infection prevention and sterilization. The company is currently providing improved healthcare services to medical device companies, pharma companies, hospitals and other healthcare facilities across the globe.
The consolidation, since its inception, has boosted STERIS' presence in the international markets as it will combine STERIS’ strong presence in North America with Synergy's solid footprint across Europe. It has also provided STERIS an opportunity to better serve the emerging markets of Asia-Pacific and Latin America.
High Potential in Healthcare and Pharmaceutical Industries
The bulk of STERIS’ revenues are obtained from the healthcare and pharmaceutical industries. Growth in these industries is primarily driven by the aging of the global population, as an increasing number of individuals are entering their prime healthcare consumption years. Further, these industries are dependent on advancement in healthcare delivery, acceptance of new technologies, government policies and general economic conditions. With life expectancy on the rise globally, a larger aging population increases the demand for medical procedures. This, in turn, translates into higher consumption of single-use medical devices and surgical kits processed by STERIS.
Strong Balance Sheet Position
Year to date, STERIS generated $226.7 million in cash flow from operations, up from $217.4 million a year ago. Further, free cash flow in the same period was $169.7 million compared with $144 million a year ago. On the back of a solid cash position, the company had financed acquisitions in fiscal 2018 with both cash on hand and credit facility borrowings.
Other Key Picks
Other top-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Surmodics, Inc. (SRDX - Free Report) and Veeva Systems (VEEV - Free Report) .
Integer Holdings, with a Zacks Rank #1, has an earnings growth rate of 31.2% for the first quarter of 2019.
Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank of 2 currently.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Here's Why You Should Invest in STERIS (STE) Stock Right Now
STERIS plc (STE - Free Report) has been gaining investor confidence on continued positive results. Over the past year, the company’s stock has outperformed its industry. The stock has gained 2.2% against the industry’s 10.2% fall. Also, the company has outperformed the S&P 500’s 8.1% decline.
This renowned global provider of infection prevention, decontamination, microbial reduction, and surgical and gastrointestinal support products and services has a market cap of $9.34 billion. The company has an earnings growth rate of 12.5% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
What’s Working in Favor of the Stock?
STERIS' Infection Prevention and Sterilization Wing Grows Globally
With the acquisition of U.K.-based outsourced sterilization services provider Synergy Health, STERIS has become the global leader in infection prevention and sterilization. The company is currently providing improved healthcare services to medical device companies, pharma companies, hospitals and other healthcare facilities across the globe.
The consolidation, since its inception, has boosted STERIS' presence in the international markets as it will combine STERIS’ strong presence in North America with Synergy's solid footprint across Europe. It has also provided STERIS an opportunity to better serve the emerging markets of Asia-Pacific and Latin America.
High Potential in Healthcare and Pharmaceutical Industries
The bulk of STERIS’ revenues are obtained from the healthcare and pharmaceutical industries. Growth in these industries is primarily driven by the aging of the global population, as an increasing number of individuals are entering their prime healthcare consumption years. Further, these industries are dependent on advancement in healthcare delivery, acceptance of new technologies, government policies and general economic conditions. With life expectancy on the rise globally, a larger aging population increases the demand for medical procedures. This, in turn, translates into higher consumption of single-use medical devices and surgical kits processed by STERIS.
Strong Balance Sheet Position
Year to date, STERIS generated $226.7 million in cash flow from operations, up from $217.4 million a year ago. Further, free cash flow in the same period was $169.7 million compared with $144 million a year ago. On the back of a solid cash position, the company had financed acquisitions in fiscal 2018 with both cash on hand and credit facility borrowings.
Other Key Picks
Other top-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Surmodics, Inc. (SRDX - Free Report) and Veeva Systems (VEEV - Free Report) .
Veeva Systems’ long-term earnings growth rate is estimated at 19.5%. The stock carries a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings, with a Zacks Rank #1, has an earnings growth rate of 31.2% for the first quarter of 2019.
Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank of 2 currently.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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