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Here's Why It is Worth Investing in ITT Stock Right Now
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ITT Inc. (ITT - Free Report) currently boasts robust growth prospects on strength in its businesses, innovation investments, solid liquidity position and shareholder-friendly policies.
Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $7.7 billion. In the past six months, it has gained 16.9% compared with the industry’s growth of 13.6%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Business Strength: ITT’s diversified business structure allows it to mitigate weakness across one end market with strength across others. For 2021, the company expects to generate organic sales growth of 5-7% on a year-over-year basis on the back of strength in its Friction technologies and Connectors businesses, along with the broader auto market recovery.
Innovation Investments: The company also intends to become more competent on the back of innovation investments. Notably, ITT has been investing in key markets, including electric vehicle and expanded its state-of-the-art Friction R&D center. Also, the company enhanced its wireless condition monitoring offerings with the launch of automated machine health diagnostics products. In addition, its investment to expand manufacturing automation capabilities at friction technologies business bodes well. This apart, certain cost-control measures implemented by ITT are likely to be beneficial.
Healthy Liquidity Position: The company’s strong liquidity position also adds to its strength. For instance, at the end of the first quarter of 2021, it had total available liquidity of $1.5 billion, including the available cash balance. Notably, in the quarter, its free cash flow surged 71% to $54 million on a year-over-year basis. For 2021, the company anticipates free cash flow generation of $300-$320 million.
Shareholder-Friendly Policies: ITT remains focused on rewarding shareholders through dividend payouts and share-repurchases. For instance, in first-quarter 2021, it paid out dividends worth $19.1 million apart from repurchasing shares worth $61 million. The quarterly dividend rate was hiked by 30% in February 2021.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for the company’s 2021 earnings has moved up from $3.89 to $3.92. Further, the consensus estimate for its 2022 earnings has increased from $4.48 to $4.49.
Crane delivered an earnings surprise of 26.72% in the last reported quarter.
Griffon delivered an earnings surprise of 50.00% in the last reported quarter.
Macquarie delivered an earnings surprise of 25.00% in the last reported quarter.
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Here's Why It is Worth Investing in ITT Stock Right Now
ITT Inc. (ITT - Free Report) currently boasts robust growth prospects on strength in its businesses, innovation investments, solid liquidity position and shareholder-friendly policies.
Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $7.7 billion. In the past six months, it has gained 16.9% compared with the industry’s growth of 13.6%.
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Business Strength: ITT’s diversified business structure allows it to mitigate weakness across one end market with strength across others. For 2021, the company expects to generate organic sales growth of 5-7% on a year-over-year basis on the back of strength in its Friction technologies and Connectors businesses, along with the broader auto market recovery.
Innovation Investments: The company also intends to become more competent on the back of innovation investments. Notably, ITT has been investing in key markets, including electric vehicle and expanded its state-of-the-art Friction R&D center. Also, the company enhanced its wireless condition monitoring offerings with the launch of automated machine health diagnostics products. In addition, its investment to expand manufacturing automation capabilities at friction technologies business bodes well. This apart, certain cost-control measures implemented by ITT are likely to be beneficial.
Healthy Liquidity Position: The company’s strong liquidity position also adds to its strength. For instance, at the end of the first quarter of 2021, it had total available liquidity of $1.5 billion, including the available cash balance. Notably, in the quarter, its free cash flow surged 71% to $54 million on a year-over-year basis. For 2021, the company anticipates free cash flow generation of $300-$320 million.
Shareholder-Friendly Policies: ITT remains focused on rewarding shareholders through dividend payouts and share-repurchases. For instance, in first-quarter 2021, it paid out dividends worth $19.1 million apart from repurchasing shares worth $61 million. The quarterly dividend rate was hiked by 30% in February 2021.
Estimate Revisions: In the past 30 days, the Zacks Consensus Estimate for the company’s 2021 earnings has moved up from $3.89 to $3.92. Further, the consensus estimate for its 2022 earnings has increased from $4.48 to $4.49.
Other Stocks to Consider
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 delivered an earnings surprise of 26.72% in the last reported quarter.
Griffon delivered an earnings surprise of 50.00% in the last reported quarter.
Macquarie delivered an earnings surprise of 25.00% in the last reported quarter.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>