Parker-Hannifin Corporation (PH - Free Report) is backed by multiple tailwinds despite the high cost of sales and operating expenses.
The company’s Diversified Industrial segment is benefitting from strength across its North American and International segments. The robust order level is supporting growth for the Aerospace Systems segment. PH is also likely to gain from its unique Win Strategy (version 3.0 launched in fiscal 2020) in the quarters ahead. The Win Strategy focuses on innovation, strategic positioning, distribution growth and incentive plan changes to drive organic growth. Accretive pricing and supply-chain management actions are also providing significant relief to the company
Parker-Hannifin’s ability to penetrate different markets through acquisitions is commendable. The company acquired Meggitt plc in September 2022 which expanded Parker-Hannifin’s presence in the UK, positioning it well to provide a broader suite of solutions for aircraft and aero-engine components and systems.
The company utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In fiscal 2022 (ended Jun 30, 2022), PH paid out dividends worth $569.9 million (increasing 19.9% from the year-ago period’s level) and distributed dividends of $171.2 million (up 28.8% from the year-ago period), in the first quarter of fiscal 2023 (ended Sep 30, 2022). The company also hiked the quarterly dividend by 29% or 30 cents to $1.33 per share in April 2022.
In light of the above-mentioned positives, we believe that investors should retain the PH stock for now, as suggested by its current Zacks Rank #3 (Hold).
In the past six months, the stock has increased 16.9%, outperforming the industry’s 16.7% rise.
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
MRC Global Inc. (MRC - Free Report) presently sports a Zacks Rank #1 (Strong Buy). MRC’s earnings surprise in the last four quarters was 103%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
In the past 60 days, MRC Global’s earnings estimates have increased 16.2% for 2022. The stock has rallied 15.7% in the past six months.
Xylem Inc. (XYL - Free Report) presently has a Zacks Rank #2 (Buy). XYL’s earnings surprise in the last four quarters was 13.3%, on average.
In the past 60 days, Xylem’s earnings estimates have increased 5% for 2022. The stock has rallied 40.4% in the past six months.
EnerSys (ENS - Free Report) delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2.
ENS’ earnings estimates have increased 0.6% for fiscal 2023 in the past 60 days. The stock has gained 24.7% in the past six months.
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Parker-Hannifin Corporation (PH - Free Report) is backed by multiple tailwinds despite the high cost of sales and operating expenses.
The company’s Diversified Industrial segment is benefitting from strength across its North American and International segments. The robust order level is supporting growth for the Aerospace Systems segment. PH is also likely to gain from its unique Win Strategy (version 3.0 launched in fiscal 2020) in the quarters ahead. The Win Strategy focuses on innovation, strategic positioning, distribution growth and incentive plan changes to drive organic growth. Accretive pricing and supply-chain management actions are also providing significant relief to the company
Parker-Hannifin’s ability to penetrate different markets through acquisitions is commendable. The company acquired Meggitt plc in September 2022 which expanded Parker-Hannifin’s presence in the UK, positioning it well to provide a broader suite of solutions for aircraft and aero-engine components and systems.
The company utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In fiscal 2022 (ended Jun 30, 2022), PH paid out dividends worth $569.9 million (increasing 19.9% from the year-ago period’s level) and distributed dividends of $171.2 million (up 28.8% from the year-ago period), in the first quarter of fiscal 2023 (ended Sep 30, 2022). The company also hiked the quarterly dividend by 29% or 30 cents to $1.33 per share in April 2022.
In light of the above-mentioned positives, we believe that investors should retain the PH stock for now, as suggested by its current Zacks Rank #3 (Hold).
In the past six months, the stock has increased 16.9%, outperforming the industry’s 16.7% rise.
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
MRC Global Inc. (MRC - Free Report) presently sports a Zacks Rank #1 (Strong Buy). MRC’s earnings surprise in the last four quarters was 103%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
In the past 60 days, MRC Global’s earnings estimates have increased 16.2% for 2022. The stock has rallied 15.7% in the past six months.
Xylem Inc. (XYL - Free Report) presently has a Zacks Rank #2 (Buy). XYL’s earnings surprise in the last four quarters was 13.3%, on average.
In the past 60 days, Xylem’s earnings estimates have increased 5% for 2022. The stock has rallied 40.4% in the past six months.
EnerSys (ENS - Free Report) delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2.
ENS’ earnings estimates have increased 0.6% for fiscal 2023 in the past 60 days. The stock has gained 24.7% in the past six months.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
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