Berry Global Group, Inc. ( BERY Quick Quote BERY - Free Report) currently boasts strong prospects, supported by its diversified businesses, a solid product portfolio, growth investments and a sound capital-deployment strategy. Notably, this currently Zacks Rank #2 (Buy) company has a market capitalization of $9.2 billion. Year to date, the stock has gained 21.7% compared with the industry’s growth of 9.8%. Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Prolific Business Structure: Berry Global is set to benefit from its diversified business structure, which allows it to mitigate the adverse impacts of weakness in one end market with strength across others. Also, the company’s strong portfolio of products has been proving beneficial over time. In the quarters ahead, strength across the company’s grocery and consumer-centric end markets along with strong demand for its healthcare products as well as organic growth investments are likely to drive its performance. Strong Cash Flow: Strong cash flows enable the company to prudently manage capital for improving organic growth capabilities, acquisitions and debt repayment. For fiscal 2021 (ending September 2021), the company anticipates cash flow from operations of $1,575-$1,675 million and free cash flow of $875-$975 million. Notably, in fiscal 2020 (ended September 2020), and first-half fiscal 2021, the company repaid a long-term debt of $2,436 million and $2,683 million, respectively. Accretive Acquisitions: Berry Global deepens focus on strengthening its businesses through the addition of assets. The company’s acquired business of RPC Group (July 2019) is steadily enhancing its growth opportunities in the plastic and recycled packaging industry. In fiscal 2020, buyouts contributed 28.6% to the company’s net sales. Strategic Initiatives: The company’s focus on improving its operational productivity is driving profitability and maintaining a healthy margin performance. For instance, in second-quarter fiscal 2021 (ended Apr 3, 2021), its adjusted operating margin climbed 20 basis points on a year-over-year basis to 11.4%. The Zacks Consensus Estimate for Berry Global’s earnings is pegged at $5.68 for fiscal 2021, up 5.4% from the 30-day-ago figure. The consensus estimate for fiscal 2022 (September 2022) earnings stands at $6.23, having moved 5.6% north over the same time frame. Other Stocks to Consider
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Industrial Products sector are Barnes Group, Inc. ( B Quick Quote B - Free Report) , Dover Corporation ( DOV Quick Quote DOV - Free Report) and Graco Inc. ( GGG Quick Quote GGG - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Barnes pulled off a trailing four-quarter earnings surprise of 19.45%, on average. Dover came up with a trailing four-quarter earnings surprise of 21.35%, on average. Graco delivered a trailing four-quarter earnings surprise of 28.28%, on average. 5 Stocks Set to Double
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