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Here's Why You Should Consider Investing in ITT Right Now
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ITT Inc. (ITT - Free Report) is well poised for growth, courtesy of strength across its businesses, healthy liquidity position, innovation investments and a sound capital-deployment strategy.
The Zacks Rank #2 (Buy) company has a market capitalization of $8.1 billion. In the past three months, the stock has appreciated 20.1% compared with the industry’s growth of 10.9%.
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Business Strength: ITT has been benefiting from its diversified business operations, which allow it to mitigate risks across one end market with strength across others. For 2021, the company anticipates year-over-year organic sales growth of 5-7%, driven by strength in its Friction technologies and Connectors businesses along with the broader auto market recovery.
Solid Liquidity Position: The company’s strong liquidity position is likely to help it tide over the difficult operating conditions caused by the pandemic. Exiting first-quarter 2021, the company had total available liquidity of $1.5 billion, including the available cash balance. Also, in the quarter, its free cash flow increased 71% to $54 million year over year. For 2021, ITT expects to generate free cash flow of $300-$320 million.
Rewards to Shareholders: It remains committed toward rewarding shareholders through share-repurchase programs and dividend payouts. For instance, in first-quarter 2021, ITT repurchased shares worth $61 million and paid out dividends worth $19.1 million. Further, it hiked its quarterly dividend rate by 30% in February 2021.
Initiatives: The company is also poised to gain from its innovation investments. Notably, in October 2020, it unveiled its Value Line of QUIETPATH aftermarket brand brake shim and abutment clip materials. Also, ITT has been investing in key markets, including electric vehicle and expanded its state-of-the-art Friction R&D center. Moreover, several investments to upgrade its ITT Smart Pad and expand manufacturing automation capabilities at friction technologies business bode well. In addition, certain cost-control measures implemented are likely to be beneficial. In 2020, the company executed more than $100 million of cost actions, including $65 million in structural cost reductions and $40 million of discretionary expense reductions.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for its 2021 earnings has moved up from $3.71 to $3.86 on five upward estimate revisions against none downward. Further, the consensus estimate for its 2022 earnings has increased from $4.28 to $4.44 on five upward estimate revisions versus none downward.
Crane has a trailing four-quarter earnings surprise of 20.67%, on average.
Griffon has a trailing four-quarter earnings surprise of 122.71%, on average.
Macquarie has an earnings surprise of 25.00% in the last reported quarter.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Here's Why You Should Consider Investing in ITT Right Now
ITT Inc. (ITT - Free Report) is well poised for growth, courtesy of strength across its businesses, healthy liquidity position, innovation investments and a sound capital-deployment strategy.
The Zacks Rank #2 (Buy) company has a market capitalization of $8.1 billion. In the past three months, the stock has appreciated 20.1% compared with the industry’s growth of 10.9%.
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Business Strength: ITT has been benefiting from its diversified business operations, which allow it to mitigate risks across one end market with strength across others. For 2021, the company anticipates year-over-year organic sales growth of 5-7%, driven by strength in its Friction technologies and Connectors businesses along with the broader auto market recovery.
Solid Liquidity Position: The company’s strong liquidity position is likely to help it tide over the difficult operating conditions caused by the pandemic. Exiting first-quarter 2021, the company had total available liquidity of $1.5 billion, including the available cash balance. Also, in the quarter, its free cash flow increased 71% to $54 million year over year. For 2021, ITT expects to generate free cash flow of $300-$320 million.
Rewards to Shareholders: It remains committed toward rewarding shareholders through share-repurchase programs and dividend payouts. For instance, in first-quarter 2021, ITT repurchased shares worth $61 million and paid out dividends worth $19.1 million. Further, it hiked its quarterly dividend rate by 30% in February 2021.
Initiatives: The company is also poised to gain from its innovation investments. Notably, in October 2020, it unveiled its Value Line of QUIETPATH aftermarket brand brake shim and abutment clip materials. Also, ITT has been investing in key markets, including electric vehicle and expanded its state-of-the-art Friction R&D center. Moreover, several investments to upgrade its ITT Smart Pad and expand manufacturing automation capabilities at friction technologies business bode well. In addition, certain cost-control measures implemented are likely to be beneficial. In 2020, the company executed more than $100 million of cost actions, including $65 million in structural cost reductions and $40 million of discretionary expense reductions.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for its 2021 earnings has moved up from $3.71 to $3.86 on five upward estimate revisions against none downward. Further, the consensus estimate for its 2022 earnings has increased from $4.28 to $4.44 on five upward estimate revisions versus none downward.
Other Key Picks
Some other top-ranked stocks from the same space are Crane Co. (CR - Free Report) , Griffon Corporation (GFF - Free Report) and Macquarie Infrastructure Company , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Crane has a trailing four-quarter earnings surprise of 20.67%, on average.
Griffon has a trailing four-quarter earnings surprise of 122.71%, on average.
Macquarie has an earnings surprise of 25.00% in the last reported quarter.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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