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Reasons Why Ingersoll Rand (IR) Should be in Your Portfolio
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Ingersoll Rand Inc. (IR - Free Report) stands to benefit from strength across its businesses, solid product offerings, strategic acquisitions and a sound capital-deployment strategy.
Image Source: Zacks Investment Research
This Zacks Rank #2 (Buy) company has a market capitalization of $37.9 billion. In the past six months, the stock has risen 45.3% compared with the industry’s growth of 30.7%.
Let’s delve into the factors that make this company investment-worthy at the moment.
Strength in Businesses: Ingersoll Rand continues to witness higher orders across its product portfolio of compressors within the Industrial Technologies & Services segment. The company expects orders for industrial vacuums and blowers to improve in the quarters ahead, which is expected to drive the Industrial Technologies & Services unit. For 2024, IR expects total revenues to increase 5-7% year over year, while organic revenues are estimated to increase 2-4%
Acquisition Benefits: Ingersoll Rand’s acquisition of Friulair (February 2024) is expected to boost its air dryer business and add new chiller production capabilities, thereby aiding its Industrial Technologies and Services segment. The buyout enhanced IR's presence across food and beverage, and pharmaceutical end markets. In October 2023, the company acquired Slovakia-based Oxywise and Canada-based Fraserwoods, boosting its capabilities in the high-growth, sustainable end markets.
Also, in March 2024, IR entered into a definitive deal to purchase ILC Dover from New Mountain Capital, LLC, for $2.325 billion in cash. The inclusion of ILC Dover’s single-use solutions in biopharma and pharma production processes will strongly complement Ingersoll Rand’s expertise in liquid handling technologies and positive displacement pumps. This will enable IR to set up a life sciences platform, which will likely generate revenues of $700 million, thus allowing it to boost its growth in the life sciences market.
Strong Liquidity Position: IR’s strong liquidity position adds to its strength. For instance, exiting 2023, Ingersoll Rand’s cash and cash equivalents totaled $1.6 billion, significantly higher than its short-term borrowings and current maturities of long-term debt of $30.6 million. This suggests that the company has adequate cash to meet its short-term debt obligations.
Also, strong free cash flow generation supports the company’s capital deployment policies. In 2023, it generated free cash flow of $1.3 billion, representing growth of 65% year over year.
Shareholder-Friendly Moves: Ingersoll Rand is focused on rewarding shareholders through dividend payouts and share repurchases. In 2023, the company paid dividends of $32.4 million and repurchased shares worth $263 million.
Other Key Picks
We have highlighted three other top-ranked stocks from the same space, namely Applied Industrial Technologies (AIT - Free Report) , Illinois Tool Works (ITW - Free Report) and Luxfer Holdings plc (LXFR - Free Report) . While Applied Industrial currently sports a Zacks Rank #1 (Strong Buy), Illinois Tool and Luxfer Holdings carry a Zacks Rank of 2 each. You can see the complete list of today’s Zacks #1 Rank 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 2.5%.
Illinois Tool delivered a trailing four-quarter average earnings surprise of 3.3%. In the past 60 days, the Zacks Consensus Estimate for ITW’s 2024 earnings has inched down 0.1%.
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 Ingersoll Rand (IR) Should be in Your Portfolio
Ingersoll Rand Inc. (IR - Free Report) stands to benefit from strength across its businesses, solid product offerings, strategic acquisitions and a sound capital-deployment strategy.
Image Source: Zacks Investment Research
This Zacks Rank #2 (Buy) company has a market capitalization of $37.9 billion. In the past six months, the stock has risen 45.3% compared with the industry’s growth of 30.7%.
Let’s delve into the factors that make this company investment-worthy at the moment.
Strength in Businesses: Ingersoll Rand continues to witness higher orders across its product portfolio of compressors within the Industrial Technologies & Services segment. The company expects orders for industrial vacuums and blowers to improve in the quarters ahead, which is expected to drive the Industrial Technologies & Services unit. For 2024, IR expects total revenues to increase 5-7% year over year, while organic revenues are estimated to increase 2-4%
Acquisition Benefits: Ingersoll Rand’s acquisition of Friulair (February 2024) is expected to boost its air dryer business and add new chiller production capabilities, thereby aiding its Industrial Technologies and Services segment. The buyout enhanced IR's presence across food and beverage, and pharmaceutical end markets. In October 2023, the company acquired Slovakia-based Oxywise and Canada-based Fraserwoods, boosting its capabilities in the high-growth, sustainable end markets.
Also, in March 2024, IR entered into a definitive deal to purchase ILC Dover from New Mountain Capital, LLC, for $2.325 billion in cash. The inclusion of ILC Dover’s single-use solutions in biopharma and pharma production processes will strongly complement Ingersoll Rand’s expertise in liquid handling technologies and positive displacement pumps. This will enable IR to set up a life sciences platform, which will likely generate revenues of $700 million, thus allowing it to boost its growth in the life sciences market.
Strong Liquidity Position: IR’s strong liquidity position adds to its strength. For instance, exiting 2023, Ingersoll Rand’s cash and cash equivalents totaled $1.6 billion, significantly higher than its short-term borrowings and current maturities of long-term debt of $30.6 million. This suggests that the company has adequate cash to meet its short-term debt obligations.
Also, strong free cash flow generation supports the company’s capital deployment policies. In 2023, it generated free cash flow of $1.3 billion, representing growth of 65% year over year.
Shareholder-Friendly Moves: Ingersoll Rand is focused on rewarding shareholders through dividend payouts and share repurchases. In 2023, the company paid dividends of $32.4 million and repurchased shares worth $263 million.
Other Key Picks
We have highlighted three other top-ranked stocks from the same space, namely Applied Industrial Technologies (AIT - Free Report) , Illinois Tool Works (ITW - Free Report) and Luxfer Holdings plc (LXFR - Free Report) . While Applied Industrial currently sports a Zacks Rank #1 (Strong Buy), Illinois Tool and Luxfer Holdings carry a Zacks Rank of 2 each. You can see the complete list of today’s Zacks #1 Rank 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 2.5%.
Illinois Tool delivered a trailing four-quarter average earnings surprise of 3.3%. In the past 60 days, the Zacks Consensus Estimate for ITW’s 2024 earnings has inched down 0.1%.
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%.