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.
Investors can insert themselves into favorable trends within the market by targeting sectors witnessing positive earnings estimate revisions.
That’s precisely what the Zacks Industrial Products sector has seen lately, which has pushed it up to the #1 spot out of all Zacks 16 sectors.
And as we’re all aware, 50% of a stock's price movement can be attributed to its group, further stating the importance of targeting areas that analysts have recently become bullish on.
As shown in the chart below, the sector has displayed remarkable relative strength over the last three months, up nearly 20% vs. the S&P 500’s 8% gain.
Image Source: Zacks Investment Research
Three stocks from the sector – Crane Holdings (CR - Free Report) , Cintas Corp. (CTAS - Free Report) , and W.W. Grainger Inc. (GWW - Free Report) – could all be considerations for those looking to tap into the relative strength.
Below is a chart illustrating the performance of all three stocks over the last three months, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Crane Holdings
Crane Holdings is a diversified manufacturer of engineered industrial products with four business segments: Aerospace and Electronics, Process Flow Technologies, Payment and Merchandising Technology, and Engineered Materials. CR sports a Zacks Rank #2 (Buy).
Many stocks in the Zacks Industrial Products sector pay dividends, and Crane is no different; the company’s annual dividend currently yields 1.8%, a few ticks higher than its Zacks sector average.
Image Source: Zacks Investment Research
In addition, CR’s valuation multiples don’t appear stretched by any means, further reinforced by its Style Score of a “B” for Value. The company’s forward earnings multiple stands at 12.9X, nicely beneath its 14.3X five-year median.
Image Source: Zacks Investment Research
And for the cherry on top, CR has consistently exceeded quarterly estimates, chaining together seven consecutive quarters of exceeding both earnings and revenue expectations.
Image Source: Zacks Investment Research
W.W. Grainger Inc.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair, and operating (MRO) products and services. The company boasts the highly-coveted Zacks Rank #1 (Strong Buy).
It’s hard to ignore the company’s growth trajectory, with estimates calling for nearly 50% earnings growth on the back of a 16% Y/Y revenue increase in its current fiscal year (FY22).
GWW carries a Style Score of a “B” for Growth.
Image Source: Zacks Investment Research
The company does pay a dividend, currently yielding 1.2% and modestly below its Zacks sector average.
On the flip side, however, GWW has shown a commitment to increasingly rewarding its shareholders, growing its payout by more than 6% over the last five years.
Image Source: Zacks Investment Research
Thanks to a strong Q3, GWW upped its current year (FY22) guidance, forecasting net sales in a range of $15.1 billion - $15.2 billion (previously $15 billion - $15.2 billion). Further, the company expects EPS of $29.10 - $29.70 (previously $27.25 - $28.75).
Cintas Corp.
With products and services that include uniforms, floor care, restroom supplies, first aid, and safety products, Cintas takes care of many business needs. Like the stocks above, the company has seen its earnings outlook drift higher as of late, landing it into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
While the company’s annual dividend yield of 1% is notably lower than its Zacks sector average, it’s worth noting that Cintas hiked its quarterly dividend by 21% just last July.
Image Source: Zacks Investment Research
And Cintas is no stranger to consistent growth, with estimates calling for 12% earnings growth in its current fiscal year (FY23) and a further 10% in FY24.
Image Source: Zacks Investment Research
Bottom Line
Relative strength focuses on stocks or other assets that have performed well relative to the market or a relevant benchmark.
And all three stocks above – Crane Holdings (CR - Free Report) , Cintas Corp. (CTAS - Free Report) , and W.W. Grainger Inc. (GWW - Free Report) – have displayed precisely that, going on strong runs over the last three months on the back of an improved earnings outlook.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Top Picks From a Hot Industrial Products Sector
Investors can insert themselves into favorable trends within the market by targeting sectors witnessing positive earnings estimate revisions.
That’s precisely what the Zacks Industrial Products sector has seen lately, which has pushed it up to the #1 spot out of all Zacks 16 sectors.
And as we’re all aware, 50% of a stock's price movement can be attributed to its group, further stating the importance of targeting areas that analysts have recently become bullish on.
As shown in the chart below, the sector has displayed remarkable relative strength over the last three months, up nearly 20% vs. the S&P 500’s 8% gain.
Image Source: Zacks Investment Research
Three stocks from the sector – Crane Holdings (CR - Free Report) , Cintas Corp. (CTAS - Free Report) , and W.W. Grainger Inc. (GWW - Free Report) – could all be considerations for those looking to tap into the relative strength.
Below is a chart illustrating the performance of all three stocks over the last three months, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Crane Holdings
Crane Holdings is a diversified manufacturer of engineered industrial products with four business segments: Aerospace and Electronics, Process Flow Technologies, Payment and Merchandising Technology, and Engineered Materials. CR sports a Zacks Rank #2 (Buy).
Many stocks in the Zacks Industrial Products sector pay dividends, and Crane is no different; the company’s annual dividend currently yields 1.8%, a few ticks higher than its Zacks sector average.
Image Source: Zacks Investment Research
In addition, CR’s valuation multiples don’t appear stretched by any means, further reinforced by its Style Score of a “B” for Value. The company’s forward earnings multiple stands at 12.9X, nicely beneath its 14.3X five-year median.
Image Source: Zacks Investment Research
And for the cherry on top, CR has consistently exceeded quarterly estimates, chaining together seven consecutive quarters of exceeding both earnings and revenue expectations.
Image Source: Zacks Investment Research
W.W. Grainger Inc.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair, and operating (MRO) products and services. The company boasts the highly-coveted Zacks Rank #1 (Strong Buy).
It’s hard to ignore the company’s growth trajectory, with estimates calling for nearly 50% earnings growth on the back of a 16% Y/Y revenue increase in its current fiscal year (FY22).
GWW carries a Style Score of a “B” for Growth.
Image Source: Zacks Investment Research
The company does pay a dividend, currently yielding 1.2% and modestly below its Zacks sector average.
On the flip side, however, GWW has shown a commitment to increasingly rewarding its shareholders, growing its payout by more than 6% over the last five years.
Image Source: Zacks Investment Research
Thanks to a strong Q3, GWW upped its current year (FY22) guidance, forecasting net sales in a range of $15.1 billion - $15.2 billion (previously $15 billion - $15.2 billion). Further, the company expects EPS of $29.10 - $29.70 (previously $27.25 - $28.75).
Cintas Corp.
With products and services that include uniforms, floor care, restroom supplies, first aid, and safety products, Cintas takes care of many business needs. Like the stocks above, the company has seen its earnings outlook drift higher as of late, landing it into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
While the company’s annual dividend yield of 1% is notably lower than its Zacks sector average, it’s worth noting that Cintas hiked its quarterly dividend by 21% just last July.
Image Source: Zacks Investment Research
And Cintas is no stranger to consistent growth, with estimates calling for 12% earnings growth in its current fiscal year (FY23) and a further 10% in FY24.
Image Source: Zacks Investment Research
Bottom Line
Relative strength focuses on stocks or other assets that have performed well relative to the market or a relevant benchmark.
And all three stocks above – Crane Holdings (CR - Free Report) , Cintas Corp. (CTAS - Free Report) , and W.W. Grainger Inc. (GWW - Free Report) – have displayed precisely that, going on strong runs over the last three months on the back of an improved earnings outlook.