Roper Technologies, Inc. (ROP - Free Report) currently boasts robust growth prospects on strength in its businesses, solid product portfolio, acquired assets and a sound capital-deployment strategy.
Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $44.7 billion. In the past six months, it has gained 18.3% compared with the industry’s growth of 2.1%.
Let’s delve onto the factors that make investment in the company a smart choice at the moment.
Business Strength: Roper’s Network Software & Systems segment is likely to show resilience during the coronavirus outbreak-led global market downturn on high recurring revenue mix, strong customer retention, expanding networks, and strength across its DAT and ConstructConnect businesses. Also, high demand for the medical products will likely support the Measurement & Analytical Solutions segment. Notably, organic revenues for both of its Network Software & Systems, and Measurement & Analytical Solutions segments are anticipated to grow in a mid-single-digit range for the second half of 2020.
Acquisition Benefits: The company intends to strengthen and expand its businesses through acquisitions. Some of the notable buyouts made by Roper include the acquisition of iPipeline Holdings and ComputerEase Software in August 2019. Also, in the last month, it entered a contract to purchase Denver, CO-based Vertafore, a leading provider of cloud-based software solutions. Notably, acquisitions had a positive contribution of 2% and 1% of revenue growth in the first and second quarters of 2020, respectively.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts. In the first half of 2020, the company paid out dividends worth $106.6 million. Also, in November 2019, it announced an 11% hike in its quarterly dividend rate.
Initiatives: Roper’s unique niche market strategy, strong operational execution, and cost-control measures have been aiding it in driving its profitability and maintain a healthy margin performance. For instance, its adjusted gross profit margin expanded 70 basis points to 64.7% year over year in the second quarter on the back of strong operating leverage.
In the past 30 days, the Zacks Consensus Estimate for its 2020 earnings has trended up from $12.28 to $12.54 on five upward estimate revisions against none downward.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Tennant Company (TNC - Free Report) , Helios Technologies, Inc. (HLIO - Free Report) and Altra Industrial Motion Corp. (AIMC - Free Report) . While Tennant sports a Zacks Rank #1 (Strong Buy), Helios and Altra Industrial carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tennant delivered an earnings surprise of 107.12%, on average, in the trailing four quarters.
Helios delivered an earnings surprise of 46.04%, on average, in the trailing four quarters.
Altra Industrial delivered an earnings surprise of 31.43%, on average, in the trailing four quarters.
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