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Here's Why You Should Add Greif (GEF) to Your Portfolio Now
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Greif, Inc. (GEF - Free Report) is gaining from the solid demand in the key end markets, expected benefits from the Caraustar acquisition and its restructuring actions. Focus on operational execution and capital discipline will drive growth. These factors make Greif a compelling investment option.
The company currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance: The stock has gained 26.8% so far this year, outperforming the industry’s growth of 7.1%.
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Earnings & Sales Top Estimates in Q4: Greif’s fourth-quarter fiscal 2021 adjusted earnings per share of $1.93 beat the Zacks Consensus Estimate of $1.49 and improved 147% year over year. Revenues of $1,578 million topped the Zacks Consensus Estimate of $1,445 million and surged 36% year on year.
Positive Outlook: Greif expects adjusted earnings per share between $5.85 and $6.45. The mid-point of the guidance indicates a year-over-year improvement of 10%.
Earnings Surprise History: The company has a trailing four-quarter earnings surprise of 16.8%, on average.
Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for the company’s fiscal 2022 earnings has moved north by 6% over the past 30 days.
Positive Growth Projections: The Zacks Consensus Estimate for the fiscal 2022 earnings per share is currently pegged at $6.24, indicating year-over-year growth of 11.4%. The stock has an estimated long-term earnings growth rate of 10%.
Valuation is Inexpensive: The trailing 12-month EV/EBITDA ratio is 6.69 for the company, while the industry's average trailing 12-month EV/EBITDA ratio is 19.8.
Growth Drivers
Greif is witnessing broad-based improvement in several of its key end markets. The company’s Global Industrial Packaging segment has been recording solid volume growth for chemicals, specialty chemicals and lubricants. It witnessed impressive growth in the global rigid Intermediate Bulk Container (IBC) and large plastic drums over the last few quarters, backed by the strategic growth investments in the United States and EMEA, and ongoing recovery in the industrial end markets.
The Paper Packaging & Services segment has been gaining from solid volumes in converting operations and higher selling prices owing to increases in the published containerboard and boxboard prices. The improved demand for textiles and protective packaging has been driving tube and core volumes. Robust demand and pricing increases are likely to negate the impact of cost inflation, and contribute to the company’s earnings.
In February 2019, the company acquired Caraustar Industries, Inc. and is currently integrating its operations. The buyout has strengthened Greif’s leadership in industrial packaging, and significantly bolstered its margins, free cash flow and profitability. It continues to anticipate run-rate synergies of at least $70 million by 2022.
Greif will benefit from its focus on operational execution, capital discipline, and a solid and diverse product portfolio. The company will continue to focus on its restructuring activities, which include optimizing and integrating operations in the Paper Packaging & Services segment, rationalizing operations, and closing underperforming assets in the Global Industrial Packaging segment. The company’s constant efforts to lower debt level will aid growth.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector include SiteOne Landscape Supply (SITE - Free Report) , A. O. Smith Corporation (AOS - Free Report) and ScanSource, Inc. (SCSC - Free Report) . While SITE flaunts a Zacks Rank #1, AOS and SCSC carry a Zacks Rank #2.
SiteOne Landscape has an estimated earnings growth rate of around 77.2% for the current year. In the past 30 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 14%.
So far this year, the company’s shares have increased 47.2%. SiteOne Landscape has a trailing four-quarter earnings surprise of 130.9%, on average.
A. O. Smith has an expected earnings growth rate of around 35% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
A. O. Smith’s shares have surged 49.5% year-to-date. The company has a trailing four-quarter earnings surprise of 16.8%, on average.
ScanSource has a projected earnings growth rate of around 19% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
The company’s shares have appreciated 24.6% so far this year. ScanSource has a trailing four-quarter earnings surprise of 34.6%, on average.
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Here's Why You Should Add Greif (GEF) to Your Portfolio Now
Greif, Inc. (GEF - Free Report) is gaining from the solid demand in the key end markets, expected benefits from the Caraustar acquisition and its restructuring actions. Focus on operational execution and capital discipline will drive growth. These factors make Greif a compelling investment option.
The company currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance: The stock has gained 26.8% so far this year, outperforming the industry’s growth of 7.1%.
Earnings & Sales Top Estimates in Q4: Greif’s fourth-quarter fiscal 2021 adjusted earnings per share of $1.93 beat the Zacks Consensus Estimate of $1.49 and improved 147% year over year. Revenues of $1,578 million topped the Zacks Consensus Estimate of $1,445 million and surged 36% year on year.
Positive Outlook: Greif expects adjusted earnings per share between $5.85 and $6.45. The mid-point of the guidance indicates a year-over-year improvement of 10%.
Earnings Surprise History: The company has a trailing four-quarter earnings surprise of 16.8%, on average.
Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for the company’s fiscal 2022 earnings has moved north by 6% over the past 30 days.
Positive Growth Projections: The Zacks Consensus Estimate for the fiscal 2022 earnings per share is currently pegged at $6.24, indicating year-over-year growth of 11.4%. The stock has an estimated long-term earnings growth rate of 10%.
Valuation is Inexpensive: The trailing 12-month EV/EBITDA ratio is 6.69 for the company, while the industry's average trailing 12-month EV/EBITDA ratio is 19.8.
Growth Drivers
Greif is witnessing broad-based improvement in several of its key end markets. The company’s Global Industrial Packaging segment has been recording solid volume growth for chemicals, specialty chemicals and lubricants. It witnessed impressive growth in the global rigid Intermediate Bulk Container (IBC) and large plastic drums over the last few quarters, backed by the strategic growth investments in the United States and EMEA, and ongoing recovery in the industrial end markets.
The Paper Packaging & Services segment has been gaining from solid volumes in converting operations and higher selling prices owing to increases in the published containerboard and boxboard prices. The improved demand for textiles and protective packaging has been driving tube and core volumes. Robust demand and pricing increases are likely to negate the impact of cost inflation, and contribute to the company’s earnings.
In February 2019, the company acquired Caraustar Industries, Inc. and is currently integrating its operations. The buyout has strengthened Greif’s leadership in industrial packaging, and significantly bolstered its margins, free cash flow and profitability. It continues to anticipate run-rate synergies of at least $70 million by 2022.
Greif will benefit from its focus on operational execution, capital discipline, and a solid and diverse product portfolio. The company will continue to focus on its restructuring activities, which include optimizing and integrating operations in the Paper Packaging & Services segment, rationalizing operations, and closing underperforming assets in the Global Industrial Packaging segment. The company’s constant efforts to lower debt level will aid growth.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector include SiteOne Landscape Supply (SITE - Free Report) , A. O. Smith Corporation (AOS - Free Report) and ScanSource, Inc. (SCSC - Free Report) . While SITE flaunts a Zacks Rank #1, AOS and SCSC carry a Zacks Rank #2.
SiteOne Landscape has an estimated earnings growth rate of around 77.2% for the current year. In the past 30 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 14%.
So far this year, the company’s shares have increased 47.2%. SiteOne Landscape has a trailing four-quarter earnings surprise of 130.9%, on average.
A. O. Smith has an expected earnings growth rate of around 35% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
A. O. Smith’s shares have surged 49.5% year-to-date. The company has a trailing four-quarter earnings surprise of 16.8%, on average.
ScanSource has a projected earnings growth rate of around 19% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
The company’s shares have appreciated 24.6% so far this year. ScanSource has a trailing four-quarter earnings surprise of 34.6%, on average.