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Graco (GGG) Surges 22.7% YTD: Will the Momentum Continue?
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Shares of Graco Inc. (GGG - Free Report) have rallied 22.7% in the year-to-date period, outperforming the industry’s 8.5% increase. The upside can be linked primarily to a solid backlog level and the company’s shareholder-friendly policies.
What’s Aiding GGG?
Graco’s Industrial segment is benefiting from robust product categories such as liquid finishing and sealant and adhesive equipment. A solid backlog in powder equipment systems also bodes well. The Process segment is gaining from continued sales growth in vehicle service, industrial lubrication, process transfer pumps, environmental and semiconductor. New product launches and robust project activity in lubrication, environmental and process pumps are also aiding the segment. Strength in pro paint and high-performance coatings and foam businesses are supporting the Contractor segment’s revenues.
GGG’s investments in product innovation and capacity expansion are also driving growth. In 2023, the company anticipates capital expenditures of approximately $200 million with $130 million for facility expansion projects at its Minnesota, South Dakota, Switzerland and Romania facilities. Also, the company launched the first electric-powered airless gun Ultra QuickShot in 2023. This product is designed to provide quick and premium quality results for professional painting contractors. Such activities by GGG are expected to have boosted the company’s shares.
Image Source: Zacks Investment Research
The company’s commitment to rewarding shareholders through dividends holds promise. In the first three months of 2023, Graco paid out dividends worth $39.4 million to its shareholders, up 10.1% from the previous year. It also repurchased common stocks worth $7.8 million in the same period.
Will the Uptrend in Shares Last?
Product introductions in the Industrial segment are expected to aid GGG in the second half of 2023. Robust end-market activity and strong demand trends for new and existing products are likely to aid the company in the quarters ahead.
Zacks Rank & Other Stocks to Consider
GGG currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 7.5%. The stock has improved 19.5% in the year-to-date period.
Alamo Group Inc. (ALG - Free Report) currently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 28.1% in the year-to-date period.
Axon Enterprise (AXON - Free Report) sports a Zacks Rank of 1, at present. The company has a trailing four-quarter earnings surprise of 44.4%, on average.
In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 17.4% in the year-to-date period.
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Graco (GGG) Surges 22.7% YTD: Will the Momentum Continue?
Shares of Graco Inc. (GGG - Free Report) have rallied 22.7% in the year-to-date period, outperforming the industry’s 8.5% increase. The upside can be linked primarily to a solid backlog level and the company’s shareholder-friendly policies.
What’s Aiding GGG?
Graco’s Industrial segment is benefiting from robust product categories such as liquid finishing and sealant and adhesive equipment. A solid backlog in powder equipment systems also bodes well. The Process segment is gaining from continued sales growth in vehicle service, industrial lubrication, process transfer pumps, environmental and semiconductor. New product launches and robust project activity in lubrication, environmental and process pumps are also aiding the segment. Strength in pro paint and high-performance coatings and foam businesses are supporting the Contractor segment’s revenues.
GGG’s investments in product innovation and capacity expansion are also driving growth. In 2023, the company anticipates capital expenditures of approximately $200 million with $130 million for facility expansion projects at its Minnesota, South Dakota, Switzerland and Romania facilities. Also, the company launched the first electric-powered airless gun Ultra QuickShot in 2023. This product is designed to provide quick and premium quality results for professional painting contractors. Such activities by GGG are expected to have boosted the company’s shares.
Image Source: Zacks Investment Research
The company’s commitment to rewarding shareholders through dividends holds promise. In the first three months of 2023, Graco paid out dividends worth $39.4 million to its shareholders, up 10.1% from the previous year. It also repurchased common stocks worth $7.8 million in the same period.
Will the Uptrend in Shares Last?
Product introductions in the Industrial segment are expected to aid GGG in the second half of 2023. Robust end-market activity and strong demand trends for new and existing products are likely to aid the company in the quarters ahead.
Zacks Rank & Other Stocks to Consider
GGG currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks.
IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 7.5%. The stock has improved 19.5% in the year-to-date period.
Alamo Group Inc. (ALG - Free Report) currently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 28.1% in the year-to-date period.
Axon Enterprise (AXON - Free Report) sports a Zacks Rank of 1, at present. The company has a trailing four-quarter earnings surprise of 44.4%, on average.
In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 17.4% in the year-to-date period.