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Here's Why You Should Consider Investing in Graco (GGG) Now

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Graco Inc. (GGG - Free Report) currently boasts strong prospects on the back of its solid product portfolio, investments in capacity expansion and product innovation as well as sound capital-deployment strategy.

Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $11.8 billion. In the past six months, the company has returned 19.6% compared with the industry’s growth of 18.1%.

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

Investments in Product Innovation: Graco is well poised to benefit from its investments in product innovation and capacity expansion. For instance, the company plans to invest $115 million to roll out machinery and equipment in 2021, including $80 million for the expansion of facilities. In 2020, it introduced several products including hydraulic bolt torquing pump, high-production GrindLazer drum scarifiers — DC1520 E, DC1525 P and DC1538 G, SaniSpray HP airless sprayers and others. Going forward, Graco is likely to gain from the exposure in new markets, product development and buyouts.

Liquidity Position: The company’s healthy liquidity position adds to its strength. For instance, exiting fourth-quarter 2020, it had cash and cash equivalents of $378.9 million, while its long-term debts were just $150 million. We believe that its strong liquidity position will enable it to pay off debt obligations apart from providing higher remuneration to shareholders.

Rewards to Shareholders: It remains committed to rewarding shareholders through share-buyback programs and dividend payouts. Notably, in 2020, the company repurchased shares worth $102.1 million and paid out dividends worth $117 million. Further, in December 2020, it announced a 7.1% hike in its quarterly dividend rate.

Estimate Trend: In the past 60 days, analysts have increasingly become bullish on the company, as evident from positive earnings estimate revisions. Notably, the Zacks Consensus Estimate for its 2021 earnings has trended up from $2.08 to $2.34 on seven upward estimate revisions versus none downward. In addition, over the same timeframe, the consensus estimate for 2022 earnings has trended up from $2.21 to $2.52.

Other Stocks to Consider

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

EnPro Industries delivered a positive earnings surprise of 310.81%, on average, in the trailing four quarters.

Chart Industries delivered a positive earnings surprise of 30.8%, on average, in the trailing four quarters.

Dover delivered a positive earnings surprise of 20.01%, on average, in the trailing four quarters.

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In-Depth Zacks Research for the Tickers Above

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Graco Inc. (GGG) - free report >>

Dover Corporation (DOV) - free report >>

Chart Industries, Inc. (GTLS) - free report >>

EnPro Industries (NPO) - free report >>