Shares of global equipment maker, Terex Corp. (TEX - Free Report) reached a new 52-week high of $42.36 on Dec 31. Terex has a market cap of $4.68 billion. Average volume of shares traded over the last three months stood at approximately 1785K. Terex has long-term estimated earnings per share growth rate of 9.3%.
What’s Driving Terex Upward?
Terex’s shares have escalated following the announcement of its third quarter earnings on Oct 23. Terex reported third-quarter 2013 adjusted earnings of 77 cents per share, a 24% improvement year over year, mainly due to reduced interest expense and a lower effective tax rate. The results also surpassed the Zacks Consensus Estimate of 58 cents.
Shares of Terex also gained after it announced the initiation of quarterly dividends of 5 cents per share and a $200 million share repurchase program on Dec 5. The dividend initiation and buyback is in line with Terex’s commitment to return wealth to shareholders, which also reflects its long-term growth potential and strong financial profile.
Furthermore, the announcement on Dec 9 that Terex is selling its truck business to transform into a lifting and material handling solutions company has acted as a catalyst for the stock. The truck business will be sold for $160 million to Volvo Construction Equipment.
Going forward this year, Terex is expected to benefit from its actions undertaken in the third quarter to further adjust the cost structure of the Materials Handling & Port Solutions (MHPS) and the Cranes and Construction segments. In the near term, the strong backlog in the MHPS segment will aid results.
Other Stocks to Consider
Terex retains a short-term Zacks Rank #2 (Buy). Some other stocks worth considering in the sector include Alamo Group, Inc. , Kubota Corporation (KUBTY - Free Report) and H&E Equipment Services Inc. (HEES - Free Report) . While Alamo and Kubota hold a Zacks Rank #1 (Strong Buy), H&E Equipment Services Inc. holds a Zacks Rank #2 (Buy).