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Here's Why it is Worth Investing in Ingersoll Rand (IR) Stock

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Ingersoll Rand Inc. (IR - Free Report) currently boasts robust prospects on strength in its businesses, solid liquidity position, acquired assets and a sound capital-deployment strategy.

The Zacks Rank #2 (Buy) company has a market capitalization of $17.6 billion. In the past year, it has lost 11.3% compared with the industry’s decline of 22.6%.

Zacks Investment Research
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Let’s delve into the factors that make investment in the company a smart choice at the moment.

Business Strength: Ingersoll is poised to benefit from strength in its medical, YZ systems, Specialty and ARO businesses, along with solid demand for its vacuum pumps, blowers and compressors in the quarters ahead. The company’s talented workforce, solid product portfolio, innovation capabilities and a focus on boosting aftermarket businesses will be beneficial. Also, investments in the digital, industrial internet of things (IIoT) and the e-commerce space remain a priority. For 2022, it anticipates year-over-year revenue growth of 11-13% (8-10% on an organic basis).

Acquisition Benefits:  The company intends to strengthen and expand its businesses through acquisitions. Some of the notable buyouts made by IR are Seepex, Maximus, Air Dimensions and Tuthill Vacuum and Blower Systems in 2021. Also, its acquisition of Houdstermaatschappij Jorc (February 2022) is expected to expand the Industrial Technologies & Services segment’s product offerings. Acquisitions had a positive contribution of 6.8% of revenue growth in first-quarter 2022.

Solid Liquidity Position: IR’s healthy liquidity position of $3.1 billion (including cash of $2 billion and credit available under the revolving credit facilities of $1.1 billion) exiting the first quarter of 2022 will help the company to effectively deal with its financial obligations. For 2022, the company expects its free cash flow conversion to be more than 100%.

Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts and share buybacks. In the first three months of 2022, Ingersoll paid out dividends worth $8.2 million and repurchased shares worth $101.1 million.

Other Stocks to Consider

Some other top-ranked companies from the same space are discussed below:

Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

AIT’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022) in the past 60 days. The stock has gained 6.9% in the past year.

IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2. IEX delivered a trailing four-quarter earnings surprise of 2.8%, on average.

IDEX’s earnings estimates have increased 3.2% for 2022 in the past 60 days. Its shares have declined 15.7% in the past year.

Nordson Corporation (NDSN - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 4.5%, on average.

In the past 60 days, NDSN’s earnings estimates have increased 3% for 2022. The stock has declined 6.3% in the past year.