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Here's Why it is Worth Investing in Regal Beloit (RBC) Stock
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Regal Beloit Corporation (RBC - Free Report) currently boasts robust growth prospects on strength in its end markets, improving order trends and a sound capital-deployment strategy.
Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $5.1 billion. In the past year, it has gained 52.2% compared with the industry’s growth of 51%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Earnings Performance and Outlook: In the first quarter of 2021, Regal Beloit’s performance was strong, with earnings and sales beating estimates by 17.9% and 4.4%, respectively. Also, the bottom line grew 51.1% from the year-ago quarter on sales and margin improvements.
The company stands to benefit from solid product offerings and improving demand environment in the quarters ahead. For second-quarter 2021, it anticipates earnings of $1.85-$2.05 per share, suggesting 100% increase (at the mid-point) from that reported in second-quarter 2020.
Strength in End Markets: The company has been benefiting from improvements in industrial markets as well as strengthening heating, ventilation and air conditioning (HVAC) market, data and pool center markets. In the first quarter of 2021, the orders for North America HVAC product line increased 21%, while pool orders reflected growth of 14% on a year-over-year basis. For the second quarter of 2021, the company expects sales growth in the high-20% from the year-ago quarter.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts. In first-quarter 2021, the company paid out dividends worth $12.2 million. Also, in April 2021, it announced a 10% hike in its quarterly dividend rate. Moreover, the company rewards shareholders through the repurchase of its common shares. Although its buyback activities have been halted due to the coronavirus pandemic, it had the authorization to repurchase shares worth $210 million exiting 2020, under its $250-million share buyback program.
Earnings Estimate Revisions: Earnings estimates for Regal Beloit have been increased in the past 60 days. The Zacks Consensus Estimate for earnings is pegged at $7.75 for 2021 and $8.50 for 2022, reflecting increases of 9.9% and 3.7% from the respective 60-day-ago figures.
Eaton delivered an earnings surprise of 16.78%, on average, in the trailing four quarters.
Franklin Electric delivered an earnings surprise of 25.39%, on average, in the trailing four quarters.
SPX FLOW delivered an earnings surprise of 82.58%, on average, in the trailing four quarters.
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The only question is “Will you get into the right stocks early when their growth potential is greatest?”
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Here's Why it is Worth Investing in Regal Beloit (RBC) Stock
Regal Beloit Corporation (RBC - Free Report) currently boasts robust growth prospects on strength in its end markets, improving order trends and a sound capital-deployment strategy.
Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $5.1 billion. In the past year, it has gained 52.2% compared with the industry’s growth of 51%.
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Earnings Performance and Outlook: In the first quarter of 2021, Regal Beloit’s performance was strong, with earnings and sales beating estimates by 17.9% and 4.4%, respectively. Also, the bottom line grew 51.1% from the year-ago quarter on sales and margin improvements.
The company stands to benefit from solid product offerings and improving demand environment in the quarters ahead. For second-quarter 2021, it anticipates earnings of $1.85-$2.05 per share, suggesting 100% increase (at the mid-point) from that reported in second-quarter 2020.
Strength in End Markets: The company has been benefiting from improvements in industrial markets as well as strengthening heating, ventilation and air conditioning (HVAC) market, data and pool center markets. In the first quarter of 2021, the orders for North America HVAC product line increased 21%, while pool orders reflected growth of 14% on a year-over-year basis. For the second quarter of 2021, the company expects sales growth in the high-20% from the year-ago quarter.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts. In first-quarter 2021, the company paid out dividends worth $12.2 million. Also, in April 2021, it announced a 10% hike in its quarterly dividend rate. Moreover, the company rewards shareholders through the repurchase of its common shares. Although its buyback activities have been halted due to the coronavirus pandemic, it had the authorization to repurchase shares worth $210 million exiting 2020, under its $250-million share buyback program.
Earnings Estimate Revisions: Earnings estimates for Regal Beloit have been increased in the past 60 days. The Zacks Consensus Estimate for earnings is pegged at $7.75 for 2021 and $8.50 for 2022, reflecting increases of 9.9% and 3.7% from the respective 60-day-ago figures.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Eaton Corporation, plc (ETN - Free Report) , Franklin Electric Co., Inc. (FELE - Free Report) and SPX FLOW, Inc. (FLOW - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Eaton delivered an earnings surprise of 16.78%, on average, in the trailing four quarters.
Franklin Electric delivered an earnings surprise of 25.39%, on average, in the trailing four quarters.
SPX FLOW delivered an earnings surprise of 82.58%, on average, in the trailing four quarters.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>