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Here's Why Investing in Xylem (XYL) Stock Makes Sense Now
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Xylem Inc. (XYL - Free Report) is gaining from strength in the Water Infrastructure segment, acquired assets and shareholder-friendly moves.
Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Business Strength: Improving supply chains and strong demand in the test and measurement market are aiding the Measurement & Control Solutions segment. Growth in the utilities and industrial end markets is boosting the Water Infrastructure segment’s performance. Strength in both the building solutions and industrial end markets/applications is a key catalyst to the Applied Water segment’s growth. Robust momentum across the utilities and industrial water applications end markets augurs well for Xylem.
Expansion Efforts: The company has solidified its product portfolio and leveraged business opportunities by adding assets. XYL acquired mission-critical water treatment solutions and services provider, Evoqua, in May 2023. Evoqua’s advanced water and wastewater treatment capabilities and exposure to key industrial markets complement Xylem’s portfolio of solutions across the water cycle.
The acquisition bolsters Xylem’s position in water technologies, solutions and services, and strengthens its foothold in lucrative end markets. The transaction is likely to deliver run-rate cost synergies of $140 million (out of which $40 million is expected by 2023 end) within three years upon closing. It is also expected to strengthen the company’s balance sheet.
Rewards to Shareholders: The company is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In the first nine months of 2023, Xylem paid dividends of $219 million, up 34.4% year over year. The company also bought back shares worth $10 million in the same period.
Northward Estimate Revision: The Zacks Consensus Estimate for XYL’s 2023 earnings has been revised 3% upward in the past 60 days.
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 2.5%. The stock has risen 36.1% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 13.9%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 3.3% in the past 60 days. Shares of Applied Industrial have jumped 36.2% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the Zacks Consensus Estimate for A. O. Smith’s 2023 earnings has improved 4.7%. The stock has risen 41.7% in the past year.
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Here's Why Investing in Xylem (XYL) Stock Makes Sense Now
Xylem Inc. (XYL - Free Report) is gaining from strength in the Water Infrastructure segment, acquired assets and shareholder-friendly moves.
Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Business Strength: Improving supply chains and strong demand in the test and measurement market are aiding the Measurement & Control Solutions segment. Growth in the utilities and industrial end markets is boosting the Water Infrastructure segment’s performance. Strength in both the building solutions and industrial end markets/applications is a key catalyst to the Applied Water segment’s growth. Robust momentum across the utilities and industrial water applications end markets augurs well for Xylem.
Expansion Efforts: The company has solidified its product portfolio and leveraged business opportunities by adding assets. XYL acquired mission-critical water treatment solutions and services provider, Evoqua, in May 2023. Evoqua’s advanced water and wastewater treatment capabilities and exposure to key industrial markets complement Xylem’s portfolio of solutions across the water cycle.
The acquisition bolsters Xylem’s position in water technologies, solutions and services, and strengthens its foothold in lucrative end markets. The transaction is likely to deliver run-rate cost synergies of $140 million (out of which $40 million is expected by 2023 end) within three years upon closing. It is also expected to strengthen the company’s balance sheet.
Rewards to Shareholders: The company is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In the first nine months of 2023, Xylem paid dividends of $219 million, up 34.4% year over year. The company also bought back shares worth $10 million in the same period.
Northward Estimate Revision: The Zacks Consensus Estimate for XYL’s 2023 earnings has been revised 3% upward in the past 60 days.
Xylem Inc. Price and Consensus
Xylem Inc. price-consensus-chart | Xylem Inc. Quote
Other Stocks to Consider
Some other top-ranked companies from the Industrial Products sector are discussed below:
Flowserve Corporation (FLS - Free Report) presently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 2.5%. The stock has risen 36.1% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 13.9%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 3.3% in the past 60 days. Shares of Applied Industrial have jumped 36.2% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the Zacks Consensus Estimate for A. O. Smith’s 2023 earnings has improved 4.7%. The stock has risen 41.7% in the past year.