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Here's Why it is Worth Investing in Graco (GGG) Stock Now

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Graco Inc. (GGG - Free Report) currently boasts robust growth prospects on solid product portfolio, exposure in new markets, acquired assets and a sound capital-deployment strategy.

Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $12.1 billion. In the past three months, it has gained 21.6% compared with the industry’s growth of 20.1%.



Let’s delve into the factors that make the company a smart choice for investors at the moment.

Business Strength: Graco is poised to benefit from its strong presence in global markets, efficient management team, sound customer base and focus on keeping the production lines active. Also, solid demand for its products offered under its Contractor segment is anticipated to be beneficial for its top-line performance.

Investments in Product Innovation: The company’s focus on investing in product innovation and capacity expansion bodes well for boosting its market share. Its plan to invest $85 million to roll out machinery and equipment in 2020, including $50 million for the expansion of facilities will be advantageous. In the long term, the company will gain from the exposure in new markets, product development, buyouts and end-user conversion.

Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts and share repurchases. In the first three quarters of 2020, the company paid out dividends worth $87.7 million, up 9.9% from the year-ago period. Also, in December 2020, it announced a 7.1% hike in its quarterly dividend rate. Moreover, in the first three quarters of this year, the company repurchased common stock worth $102.1 million, way higher than $5.1 million repurchased in the year-ago period.

In the past 60 days, the Zacks Consensus Estimate for its 2020 earnings has trended up from $1.59 to $1.84 on seven upward estimate revisions against none downward. In addition, over the same timeframe, the consensus estimate for 2021 earnings has trended up from $1.85 to $2.08 on seven upward estimate revisions against none downward.

Other Stocks to Consider

Some other top-ranked stocks from the same space are EnPro Industries, Inc. (NPO - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Kaman Corporation . While EnPro currently sports a Zacks Rank #1 (Strong Buy), Applied Industrial and Kaman carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

EnPro delivered a positive earnings surprise of 279.71%, on average, in the trailing four quarters.

Applied Industrial delivered a positive earnings surprise of 14.68%, on average, in the trailing four quarters.

Kaman delivered a positive earnings surprise of 43.61%, on average, in the trailing four quarters.

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