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Reasons to Retain IDEX (IEX) Stock in Your Portfolio Now
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IDEX Corporation (IEX - Free Report) is poised to gain from strong momentum in the Fire & Safety/Diversified Products (FSDP) segment, Fluid & Metering Technologies (FMT) segment and accretive acquisitions despite weakness in the Health & Science Technologies unit, increasing cost of sales and forex woes.
Let us discuss the factors why investors should retain the stock for the time being.
Growth Catalysts
Business Strength: The FSDP segment is supported by strength in the fire and safety and Band-It businesses. In the fourth quarter of 2023, the segmental adjusted EBITDA margin increased 160 bps due to strong price cost performance, operational productivity and favorable volume leverage. Growth in the industrial businesses and strong price capture on slightly higher volumes have been aiding the FMT segment’s performance.
Accretive Acquisition: IEX’s expansion initiative is expected to drive growth in the quarters ahead. In December 2023, the company acquired advanced material science solutions provider STC Material Solutions, which expanded its growing expertise in material sciences and offered significant opportunities to collaborate with other IDEX critical components businesses on comprehensive solution sets for customers. The acquisition of Iridian Spectral in May 2023 expanded IDEX’s wide array of optical technology offerings. Iridian is part of IDEX Optical Technologies within the Health & Science Technology segment.
In November 2022, the company completed the acquisition of Muon Group, expanding its growing platform of precision technology business within the Health & Science Technologies segment. Commercial synergy potential from the combined entities is expected to boost offerings for new and existing customers. Notably, acquired assets boosted the company’s sales by 3% in the fourth quarter of 2023. IDEX anticipates buyout synergies to boost sales by approximately 1% in 2024.
Rewards to Shareholders: The company’s measures to reward its shareholders are encouraging. In 2023, IDEX’s dividend payments totaled $190.7 million (up 7.5% year over year). The current quarterly dividend rate is 64 cents per share (a hike of 7% was announced in May 2023).
In light of the above-mentioned positives, we believe, investors should retain IEX stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past year, the stock has increased 11.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
ATMU’s earnings estimates have increased 2.9% for 2024 in the past 60 days. Shares of Atmus Filtration have risen 22% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter average earnings surprise of 14.4%.
In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%. The stock has soared 28.6% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 40% in the past year.
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Reasons to Retain IDEX (IEX) Stock in Your Portfolio Now
IDEX Corporation (IEX - Free Report) is poised to gain from strong momentum in the Fire & Safety/Diversified Products (FSDP) segment, Fluid & Metering Technologies (FMT) segment and accretive acquisitions despite weakness in the Health & Science Technologies unit, increasing cost of sales and forex woes.
Let us discuss the factors why investors should retain the stock for the time being.
Growth Catalysts
Business Strength: The FSDP segment is supported by strength in the fire and safety and Band-It businesses. In the fourth quarter of 2023, the segmental adjusted EBITDA margin increased 160 bps due to strong price cost performance, operational productivity and favorable volume leverage. Growth in the industrial businesses and strong price capture on slightly higher volumes have been aiding the FMT segment’s performance.
Accretive Acquisition: IEX’s expansion initiative is expected to drive growth in the quarters ahead. In December 2023, the company acquired advanced material science solutions provider STC Material Solutions, which expanded its growing expertise in material sciences and offered significant opportunities to collaborate with other IDEX critical components businesses on comprehensive solution sets for customers. The acquisition of Iridian Spectral in May 2023 expanded IDEX’s wide array of optical technology offerings. Iridian is part of IDEX Optical Technologies within the Health & Science Technology segment.
In November 2022, the company completed the acquisition of Muon Group, expanding its growing platform of precision technology business within the Health & Science Technologies segment. Commercial synergy potential from the combined entities is expected to boost offerings for new and existing customers. Notably, acquired assets boosted the company’s sales by 3% in the fourth quarter of 2023. IDEX anticipates buyout synergies to boost sales by approximately 1% in 2024.
Rewards to Shareholders: The company’s measures to reward its shareholders are encouraging. In 2023, IDEX’s dividend payments totaled $190.7 million (up 7.5% year over year). The current quarterly dividend rate is 64 cents per share (a hike of 7% was announced in May 2023).
In light of the above-mentioned positives, we believe, investors should retain IEX stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past year, the stock has increased 11.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Atmus Filtration Technologies Inc. (ATMU - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 20.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
ATMU’s earnings estimates have increased 2.9% for 2024 in the past 60 days. Shares of Atmus Filtration have risen 22% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter average earnings surprise of 14.4%.
In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%. The stock has soared 28.6% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 40% in the past year.