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Eaton (ETN) Latest Buyout Boosts Power Distribution Business
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Eaton Corporation (ETN - Free Report) has completed the previously announced acquisition of a 50% interest in Jiangsu YiNeng Electric’s busway business, which manufactures and markets busway products in China. Jiangsu YiNeng has widespread operations in China, serving the data center, infrastructure, commercial building, telecommunication and industrial segments.
The acquisition of a stake in Jiangsu YiNeng Electric’s busway business will assist Eaton in taking advantage of the power distribution and power quality portfolio, and expanding packaged solutions that meet the needs of customers in the Asia-Pacific region.
Acquisition Benefits
Per Transparency Market Research report, the power distribution component market is likely to expand at a CAGR of 6% in the forecast period of 2020-2030 and reach a valuation of $15.3B by 2030. The report indicates that rising industrialization and increased spending for renovation as well as construction of electrical grid infrastructure — primarily in the Asia-Pacific region — will drive the global power distribution business.
Eaton’s acquisition of a stake in Jiangsu YiNeng’s business looks like quite a strategic move, with an objective of benefiting from improving demand in the Asia-Pacific region. Eaton already has expertise in power distribution and assistance. This acquisition will help it penetrate the market further.
Expansion Through Acquisitions
Eaton has been making strategic acquisitions to further expand the business and product offerings. The company has already closed the acquisition of Green Motion, a manufacturer of electric vehicle charging hardware and software. This has expanded its electric vehicle charging infrastructure and will allow it to reap benefits from energy transition. At present, Eaton’s global focus is on lowering transportation-related emissions. Advanced electric vehicles are being launched globally and the charging infrastructure will play a key role in increasing the usage of electric vehicles.
The company has also completed the acquisition of a 50% stake of HuanYu High Tech, a producer of low-voltage circuit breakers and contactors. This deal will allow Eaton to provide a wide range of low-voltage products to the local market and export the same to markets outside China.
In the first quarter, the acquisition already closed by Eaton added 1% to total revenues. The completion of the acquisition of a 50% stake in Jiangsu YiNeng Electric’s busway business will further contribute to Eaton’s top line.
Price Performance
In the past year, shares of Eaton have gained 68.7% compared with the industry’s 57.3% rally.
Long-term (three to five years) earnings growth of A.O. Smith, Emerson Electric and SPX Flow is pegged at 9%, 10.1%, and 31.5% respectively.
The Zacks Consensus Estimate for 2021 earnings per share of A.O. Smith and SPX Flow has moved up 5.9% and 17.2%, respectively, in the past 60 days. In the same time frame, Emerson Electric’s earnings estimates for 2021 have moved up 4.8%.
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Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
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Eaton (ETN) Latest Buyout Boosts Power Distribution Business
Eaton Corporation (ETN - Free Report) has completed the previously announced acquisition of a 50% interest in Jiangsu YiNeng Electric’s busway business, which manufactures and markets busway products in China. Jiangsu YiNeng has widespread operations in China, serving the data center, infrastructure, commercial building, telecommunication and industrial segments.
The acquisition of a stake in Jiangsu YiNeng Electric’s busway business will assist Eaton in taking advantage of the power distribution and power quality portfolio, and expanding packaged solutions that meet the needs of customers in the Asia-Pacific region.
Acquisition Benefits
Per Transparency Market Research report, the power distribution component market is likely to expand at a CAGR of 6% in the forecast period of 2020-2030 and reach a valuation of $15.3B by 2030. The report indicates that rising industrialization and increased spending for renovation as well as construction of electrical grid infrastructure — primarily in the Asia-Pacific region — will drive the global power distribution business.
Eaton’s acquisition of a stake in Jiangsu YiNeng’s business looks like quite a strategic move, with an objective of benefiting from improving demand in the Asia-Pacific region. Eaton already has expertise in power distribution and assistance. This acquisition will help it penetrate the market further.
Expansion Through Acquisitions
Eaton has been making strategic acquisitions to further expand the business and product offerings. The company has already closed the acquisition of Green Motion, a manufacturer of electric vehicle charging hardware and software. This has expanded its electric vehicle charging infrastructure and will allow it to reap benefits from energy transition. At present, Eaton’s global focus is on lowering transportation-related emissions. Advanced electric vehicles are being launched globally and the charging infrastructure will play a key role in increasing the usage of electric vehicles.
The company has also completed the acquisition of a 50% stake of HuanYu High Tech, a producer of low-voltage circuit breakers and contactors. This deal will allow Eaton to provide a wide range of low-voltage products to the local market and export the same to markets outside China.
In the first quarter, the acquisition already closed by Eaton added 1% to total revenues. The completion of the acquisition of a 50% stake in Jiangsu YiNeng Electric’s busway business will further contribute to Eaton’s top line.
Price Performance
In the past year, shares of Eaton have gained 68.7% compared with the industry’s 57.3% rally.
Zacks Rank & Other Key Picks
Eaton currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the same industry include A.O. Smith Corporation (AOS - Free Report) , Emerson Electric Co. (EMR - Free Report) and SPX Flow Inc. (FLOW - Free Report) , each currently having a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term (three to five years) earnings growth of A.O. Smith, Emerson Electric and SPX Flow is pegged at 9%, 10.1%, and 31.5% respectively.
The Zacks Consensus Estimate for 2021 earnings per share of A.O. Smith and SPX Flow has moved up 5.9% and 17.2%, respectively, in the past 60 days. In the same time frame, Emerson Electric’s earnings estimates for 2021 have moved up 4.8%.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>