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Reasons Why Parker-Hannifin (PH) Should be in Your Portfolio
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Parker-Hannifin Corporation (PH - Free Report) is well poised for growth courtesy of strength across its businesses, strategic acquisitions and focus on operational excellence. The company remains focused on investing in growth opportunities and solidifying its long-term market position.
Image Source: Zacks Investment Research
It has a market capitalization of $70.8 billion. Over the past three months, it has gained 22.3% compared with the industry’s growth of 15.3%.
PH currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that have been aiding the firm for a while now.
End-Market Strength: Parker-Hannifin’s Aerospace Systems segment has been benefiting from strong momentum in its commercial aftermarket business aided by steady demand across end markets. Strength in the company’s Meggitt business has also been supporting the segment. Management expects the Aerospace Systems segment’s sales to increase approximately 19.5-21.5% and organic sales to rise approximately 12% in fiscal 2024 (ending June 2024).
Business Strategy: The company has been gaining from its unique Win Strategy, which focuses on innovation, strategic positioning and distribution growth. In the second quarter of fiscal 2024 (ended December 2023), PH’s adjusted EBITDA margin increased 330 basis points year over year to 25.7%. Also, its effective pricing and supply-chain management actions have been helping it tackle challenges related to the supply chain and higher costs for a while.
Acquisition Benefits: Parker-Hannifin remains focused on acquiring businesses to gain access to new customers, regions and product lines. In September 2022, the company acquired Meggitt plc, a global leader in motion and control technologies. The acquisition expanded Parker-Hannifin’s presence in the UK, positioning it well to provide a broader suite of solutions for aircraft, and aero-engine components and systems. Acquisitions boosted the company's sales 5.6% in the first six months of fiscal 2024.
Shareholder-Friendly Policies: It remains committed to rewarding its shareholders through dividend payouts. For instance, in the first six months of fiscal 2024, the firm rewarded shareholders with dividends of $381.1 million, reflecting an increase of 11.3% year over year. Also, it hiked its quarterly dividend rate by 11% in April 2023.
Applied Industrial delivered a trailing four-quarter average earnings surprise of 10.4%. In the past 60 days, the Zacks Consensus Estimate for AIT’s 2024 earnings has increased 1.7%.
Ingersoll Rand delivered a trailing four-quarter average earnings surprise of 15.9%. In the past 60 days, the Zacks Consensus Estimate for IR’s 2024 earnings has increased 3.2%.
Luxfer delivered a trailing four-quarter average earnings surprise of 82.7%. In the past 60 days, the Zacks Consensus Estimate for LXFR’s 2024 earnings has increased 111.4%.
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Reasons Why Parker-Hannifin (PH) Should be in Your Portfolio
Parker-Hannifin Corporation (PH - Free Report) is well poised for growth courtesy of strength across its businesses, strategic acquisitions and focus on operational excellence. The company remains focused on investing in growth opportunities and solidifying its long-term market position.
Image Source: Zacks Investment Research
It has a market capitalization of $70.8 billion. Over the past three months, it has gained 22.3% compared with the industry’s growth of 15.3%.
PH currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that have been aiding the firm for a while now.
End-Market Strength: Parker-Hannifin’s Aerospace Systems segment has been benefiting from strong momentum in its commercial aftermarket business aided by steady demand across end markets. Strength in the company’s Meggitt business has also been supporting the segment. Management expects the Aerospace Systems segment’s sales to increase approximately 19.5-21.5% and organic sales to rise approximately 12% in fiscal 2024 (ending June 2024).
Business Strategy: The company has been gaining from its unique Win Strategy, which focuses on innovation, strategic positioning and distribution growth. In the second quarter of fiscal 2024 (ended December 2023), PH’s adjusted EBITDA margin increased 330 basis points year over year to 25.7%. Also, its effective pricing and supply-chain management actions have been helping it tackle challenges related to the supply chain and higher costs for a while.
Acquisition Benefits: Parker-Hannifin remains focused on acquiring businesses to gain access to new customers, regions and product lines. In September 2022, the company acquired Meggitt plc, a global leader in motion and control technologies. The acquisition expanded Parker-Hannifin’s presence in the UK, positioning it well to provide a broader suite of solutions for aircraft, and aero-engine components and systems. Acquisitions boosted the company's sales 5.6% in the first six months of fiscal 2024.
Shareholder-Friendly Policies: It remains committed to rewarding its shareholders through dividend payouts. For instance, in the first six months of fiscal 2024, the firm rewarded shareholders with dividends of $381.1 million, reflecting an increase of 11.3% year over year. Also, it hiked its quarterly dividend rate by 11% in April 2023.
Other Stocks to Consider
We have highlighted three other top-ranked stocks from the same space, namely Applied Industrial Technologies (AIT - Free Report) , Ingersoll Rand Inc. (IR - Free Report) and Luxfer Holdings plc (LXFR - Free Report) , each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial delivered a trailing four-quarter average earnings surprise of 10.4%. In the past 60 days, the Zacks Consensus Estimate for AIT’s 2024 earnings has increased 1.7%.
Ingersoll Rand delivered a trailing four-quarter average earnings surprise of 15.9%. In the past 60 days, the Zacks Consensus Estimate for IR’s 2024 earnings has increased 3.2%.
Luxfer delivered a trailing four-quarter average earnings surprise of 82.7%. In the past 60 days, the Zacks Consensus Estimate for LXFR’s 2024 earnings has increased 111.4%.