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Why Roper (ROP) is an Attractive Bet for Investors Now

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Roper Technologies, Inc. (ROP - Free Report) is well poised for growth, courtesy of strength across its businesses, growth investments, acquired assets and a niche market strategy.
 

Zacks Investment Research
Image Source: Zacks Investment Research

The currently Zacks Rank #2 (Buy) player has a market capitalization of $49.7 billion. In the past month, the stock has appreciated 8.2% against the industry’s decline of 2.1%.

Let’s delve into the factors that make investment in ROP a smart choice at the moment.

Business Strength: Roper is benefiting from strength across its Deltek, Aderant, CliniSys and Data Innovations businesses. Healthy businesses in Application Software, Network Software & Systems, Measurement & Analytical Solutions and Process Technologies led to revenue growth 13.2% from the year-ago quarter’s figure in the fourth quarter of 2021. Roper’s profitability and margin performance will likely be driven by the unique niche market strategy and a strong operational execution. Its continued focus on investing in long-term and sustainable organic growth, along with product innovations, is expected to be beneficial. For 2022, Roper’s overall organic sales are expected to increase 6-8% year over year.

Acquisition Benefits: Roper intends to strengthen and expand its businesses through buyouts. ROP invested $217 million in acquisitions during 2021. Its acquisition of American LegalNet (January 2022) will likely help its Aderant business offer comprehensive software solutions to its customers in the legal industry. The company also made several buyouts, including Team TSI Corporation, Freight Market Intelligence Consortium, WELIS, Impact Financial Systems, Vertafore and EPSi in the year 2020.

Rewards to Shareholders: Roper remains committed to rewarding its shareholders through dividend payouts. For instance, in 2021, ROP distributed $236.4 million of dividends, up from $214.1 million disbursed in 2020. Also, in November 2021, ROP hiked its quarterly dividend rate by 10%.

Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved up from $15.40 to $15.44. Further, the consensus estimate for its 2023 earnings has increased from $ 16.41 to $16.45.

Other Stocks to Consider

Some other top-ranked companies from the Zacks Industrial Products sector are discussed below.

Nordson Corporation (NDSN - Free Report) presently has a Zacks Rank of 2. Its earnings surprise in the last four quarters was 9.85%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, NDSN’s earnings estimates have increased 1.1% for fiscal 2022 (ending October 2022). Nordson’s shares have gained 1.5% in the past month.

Donaldson Company, Inc. (DCI - Free Report) presently flaunts a Zacks Rank #2. DCI delivered a trailing four-quarter earnings surprise of 4.16%, on average.

Earnings estimates for DCI have increased 0.7% for fiscal 2022 (ending July 2022) in the past 60 days. Its shares have decreased 0.4% in the past month.

Ferguson plc (FERG - Free Report) is presently Zacks #2 Ranked. Its earnings surprise in the last four quarters was 14.2%, on average.

In the past 60 days, earnings estimates for FERG have increased 7% for fiscal 2022 (ending July 2022). The stock has declined 18.5% in the past month.

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