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Crane (CR) Stock Gains 19% YTD: What's Driving the Rally?
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Crane Co.’s (CR - Free Report) performance has been impressive since the beginning of this year, which is evident from a 19% increase in its share price. Strong growth prospects in end markets, product development programs, buyouts and shareholder-friendly policies supported positive market sentiments for the company.
The Stamford, CT-based company, with $5.4 billion of market capitalization, belongs to the Zacks Diversified Operations industry. The company currently sports a Zacks Rank #1 (Strong Buy).
Year to date, Crane has outperformed its industry’s growth of 14.3% and the S&P 500’s rally of 14.9%.
Image Source: Zacks Investment Research
Factors Favoring the Stock
Crane’s diversified business structure has been allowing it to mitigate the adverse impacts of weakness in one end market with strength across others. Driven by improvement in order rates and strong pipeline of new product development programs, the company anticipates strong growth prospects in end markets including chemical, pharmaceutical and general industrial. It expects to generate sales of $3,185 million for 2021, higher than $3,080 million guided earlier.
Also, the company utilizes its cash flow for improving organic growth capabilities, acquisitions, repurchasing shares and paying out dividend. For 2021, it predicts free cash flow of $300-$330 million. In 2020, the company paid out dividends worth $100.4 million and repurchased shares worth $70 million. In the first quarter of 2021, it paid out dividends worth $25 million to shareholders. Further, in January 2020, it hiked its quarterly dividend rate by 10%.
Moreover, the company’s acquisition of CIRCOR International’s Instrumentation & Sampling business (January 2020) has been adding value to its process valve business. Notably, Crane invested $169.5 million in buyouts (net of acquired cash) in 2020. In first-quarter 2021, buyouts boosted the company’s sales by 1% on a year-over-year basis.
Further, its focus on repositioning and cost-reduction initiatives are likely to aid it in the quarters ahead.
The Zacks Consensus Estimate for Crane’s earnings is pegged at $5.78 for 2021, up 12.7% from the 60-day-ago figure. The consensus estimate for 2022 earnings stands at $7.05, having moved 14.8% north over the same time frame.
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.
ITT delivered an earnings surprise of 21.84% in the last reported quarter.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Crane (CR) Stock Gains 19% YTD: What's Driving the Rally?
Crane Co.’s (CR - Free Report) performance has been impressive since the beginning of this year, which is evident from a 19% increase in its share price. Strong growth prospects in end markets, product development programs, buyouts and shareholder-friendly policies supported positive market sentiments for the company.
The Stamford, CT-based company, with $5.4 billion of market capitalization, belongs to the Zacks Diversified Operations industry. The company currently sports a Zacks Rank #1 (Strong Buy).
Year to date, Crane has outperformed its industry’s growth of 14.3% and the S&P 500’s rally of 14.9%.
Factors Favoring the Stock
Crane’s diversified business structure has been allowing it to mitigate the adverse impacts of weakness in one end market with strength across others. Driven by improvement in order rates and strong pipeline of new product development programs, the company anticipates strong growth prospects in end markets including chemical, pharmaceutical and general industrial. It expects to generate sales of $3,185 million for 2021, higher than $3,080 million guided earlier.
Also, the company utilizes its cash flow for improving organic growth capabilities, acquisitions, repurchasing shares and paying out dividend. For 2021, it predicts free cash flow of $300-$330 million. In 2020, the company paid out dividends worth $100.4 million and repurchased shares worth $70 million. In the first quarter of 2021, it paid out dividends worth $25 million to shareholders. Further, in January 2020, it hiked its quarterly dividend rate by 10%.
Moreover, the company’s acquisition of CIRCOR International’s Instrumentation & Sampling business (January 2020) has been adding value to its process valve business. Notably, Crane invested $169.5 million in buyouts (net of acquired cash) in 2020. In first-quarter 2021, buyouts boosted the company’s sales by 1% on a year-over-year basis.
Further, its focus on repositioning and cost-reduction initiatives are likely to aid it in the quarters ahead.
The Zacks Consensus Estimate for Crane’s earnings is pegged at $5.78 for 2021, up 12.7% from the 60-day-ago figure. The consensus estimate for 2022 earnings stands at $7.05, having moved 14.8% north over the same time frame.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Griffon Corporation (GFF - Free Report) , Macquarie Infrastructure Company and ITT Inc. (ITT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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.
ITT delivered an earnings surprise of 21.84% in the last reported quarter.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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