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Reasons to Retain Graco (GGG) Stock in Your Portfolio Now
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Graco Inc. (GGG - Free Report) is benefiting from the strong momentum in the Industrial and Process segments despite weakness in the Contractor segment and increasing costs.
Let’s discuss the factors that should cause investors to retain the stock for the time being.
Growth Catalysts
Business Strength: GGG’s Industrial segment is poised to gain from end-market strength in the Americas region. Also, growth in powder finishing product lines bodes well for the segment. The Process segment is gaining from solid momentum in all businesses and regions. For 2024, the company predicts year-over-year organic sales growth (on a constant-currency basis) in low-single digits. Also, strong price realization, along with favorable product and channel mix, is aiding the company’s margin performance.
Investments in Product Innovation: Investments in capacity expansion and product innovation are aiding the company’s performance. Graco anticipates capital expenditures of approximately $120 million in 2024, including $60 million for facility expansion projects. As for innovation, the company introduced a hot melt adhesive dispense system, the InvisiPac HM10, an electric-powered airless gun and Ultra QuickShotearlier in 2023.
Rewards to Shareholders: Graco continues to increase shareholders’ value through dividend payments & share repurchases. In 2023, Graco paid out dividends worth $158.3 million to its shareholders, up 11.4% year over year. It repurchased common stocks worth $102.3 million in the same period. In December 2023, the company hiked its quarterly dividend by 8.5% to 25.5 cents per share.
In light of the above-mentioned positives, we believe, investors should retain GGG stock for now, as suggested by its current Zacks Rank #3 (Hold). Shares of the company rose 29.2% in a year compared with the industry‘s 29.6% increase.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
BDC’s earnings estimates have remained steady for 2024 in the past 60 days. Shares of Belden have risen 5.5% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank of 2. 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 26.3% 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 39% in the past year.
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Reasons to Retain Graco (GGG) Stock in Your Portfolio Now
Graco Inc. (GGG - Free Report) is benefiting from the strong momentum in the Industrial and Process segments despite weakness in the Contractor segment and increasing costs.
Let’s discuss the factors that should cause investors to retain the stock for the time being.
Growth Catalysts
Business Strength: GGG’s Industrial segment is poised to gain from end-market strength in the Americas region. Also, growth in powder finishing product lines bodes well for the segment. The Process segment is gaining from solid momentum in all businesses and regions. For 2024, the company predicts year-over-year organic sales growth (on a constant-currency basis) in low-single digits. Also, strong price realization, along with favorable product and channel mix, is aiding the company’s margin performance.
Investments in Product Innovation: Investments in capacity expansion and product innovation are aiding the company’s performance. Graco anticipates capital expenditures of approximately $120 million in 2024, including $60 million for facility expansion projects. As for innovation, the company introduced a hot melt adhesive dispense system, the InvisiPac HM10, an electric-powered airless gun and Ultra QuickShotearlier in 2023.
Rewards to Shareholders: Graco continues to increase shareholders’ value through dividend payments & share repurchases. In 2023, Graco paid out dividends worth $158.3 million to its shareholders, up 11.4% year over year. It repurchased common stocks worth $102.3 million in the same period. In December 2023, the company hiked its quarterly dividend by 8.5% to 25.5 cents per share.
In light of the above-mentioned positives, we believe, investors should retain GGG stock for now, as suggested by its current Zacks Rank #3 (Hold). Shares of the company rose 29.2% in a year compared with the industry‘s 29.6% increase.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Belden Inc. (BDC - Free Report) presently carries a Zacks Rank #2 (Buy) and a trailing four-quarter earnings surprise of 12.3%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BDC’s earnings estimates have remained steady for 2024 in the past 60 days. Shares of Belden have risen 5.5% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank of 2. 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 26.3% 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 39% in the past year.