Back to top

Image: Bigstock

Worthington (WOR) Shares Gain 32% in 3 Months: What's Driving It?

Read MoreHide Full Article

Shares of Worthington Industries, Inc. (WOR - Free Report) have gained notably in the past three months. Impressive performances and rewards for shareholders as well as portfolio-restructuring actions seem to have boosted sentiments for the stock.

The Columbus, OH-based company belongs to the Zacks Metal Products - Procurement and Fabrication industry — which comes under the ambit of the Zacks Industrial Products sector. The company has a $3.5-billion market capitalization and it currently carries a Zacks Rank #2 (Buy).

In the past three months, the company’s shares have gained 31.8% compared with the industry’s growth of 13.8%. Notably, the S&P 500 has risen 5.7% and the sector has grown 31.9% during the same period.



 

Factors Influencing the Stock

In the past three months, Worthington has reported impressive results for third-quarter fiscal 2021 (ended February 2021), with earnings surpassing estimates by 8.8%. On a year-over-year basis, the company’s bottom line surged 112.5%, driven by lower costs of sales offsetting a decline in revenues.

The company stands to benefit from its solid product offerings, including laser welded products and pressure cylinders, and zeal to innovate products. Also, with a business spanning 90 countries, it has a solid customer base globally. Moreover, portfolio-restructuring actions (including acquisitions and divestments) taken over time have strengthened the company’s growth opportunities.

Notably, from the beginning of calendar 2021 to date, Worthington has acquired PTEC Pressure Technology GmbH and General Tools & Instruments Company LLC. However, Worthington has disposed of its shares of Nikola, divested the oil and gas equipment business, and sold off Pomona, CA-based Structural Composites Industries facility year to date.

Additionally, the policy of rewarding shareholders handsomely through share buybacks and dividend payments raises the stock’s attractiveness. Notably, its announcement of hiking the quarterly dividend rate by 12% and increasing the share repurchase authorization by 5.6 million shares resulted in a jump in the stock price nearly a week ago.

Currently, the Zacks Consensus Estimate for the company’s earnings is pegged at $4.65 for fiscal 2021 (ending May 2021) and $3.70 for fiscal 2022 (ending May 2022), marking increases of 25.7% and 15.6% from the respective 60-day-ago figures. Also, the estimate for the fourth quarter of fiscal 2021 increased from 96 cents to $1.68 in the past 60 days. Such an upward revision in earnings estimates is reflective of healthy operating conditions for the company.

Worthington Industries, Inc. Price and Consensus

 

Worthington Industries, Inc. Price and Consensus

Worthington Industries, Inc. price-consensus-chart | Worthington Industries, Inc. Quote

Other Stocks to Consider

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

In the past 60 days, earnings estimates for these stocks have improved for the current year. Further, earnings surprise for the last reported quarter was 143.14% for EnPro Industries, 28.95% for Applied Industrial and 58.75% for Chart Industries.

5G Revolution: 3 Stocks to Make Your Move

With super high data speed, it will make current cell phones obsolete and unlock the full potential of big data, cloud computing, and artificial intelligence. In the next few years this industry is predicted to create 22 million jobs and a stunning $12.3 trillion in revenue.

Today you have an historic chance to pursue almost unimaginable gains like Microsoft, Netflix, and Apple in their early phases. Zacks has released a Special Report that reveals our . . .

  • Smartest stock for 5G telecom
  • Safest investment in 5G hardware
  • Single best 5G buy of all!

Download now. Today the report is FREE >>

Published in