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Reasons Why IDEX (IEX) Stock Should be in Your Portfolio
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IDEX Corporation (IEX - Free Report) stands to benefit from strength across its businesses, acquisitions and focus on operational excellence. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
Image Source: Zacks Investment Research
It has a market capitalization of $17.6 billion. Over the past three months, it has gained 13.1% compared with the industry’s growth of 11.2%. IEX currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: IDEX has been benefiting from the strong performance of the Fire & Safety/Diversified Products (FSDP) segment. Strong momentum in the fire and safety, and Band-It businesses are supporting the FSDP segment. In the fourth quarter of 2023, revenues from the segment totaled $179 million, up 5% year over year.
Also, strength in the industrial business has been supporting the Fluid & Metering Technologies (FMT) segment. In the fourth quarter, FMT segment’s revenues increased 3.9% year over year to $299.1 million.
Accretive Acquisition: IEX believes in adding complementary businesses to its portfolio via acquisitions. In December 2023, the company acquired STC Material Solutions. This 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.
Also, the company’s acquisition of Muon Group in November 2022 expanded 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 remains committed to rewarding its shareholders through dividend payouts. For instance, in 2023, IDEX’s dividend payments totaled $190.7 million, increasing 7.5% year over year. Also, the quarterly dividend rate was hiked by 7% in May 2023.
Strong Liquidity Position: IEX’s strong free cash flow generation capacity should aid it to continue rewarding its shareholders in the quarters ahead. For 2024, it expects free cash flow of more than 100% of net income. It exited 2023 with cash and cash equivalents of $534.3 million, much higher than the current portion of long-term borrowings of $0.6 million. This implies that the company has sufficient cash to meet its current debt.
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 Chart Industries, Inc. (GTLS - Free Report) . While Applied Industrial currently sports a Zacks Rank #1 (Strong Buy), Illinois Tool and Chart Industries 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 up 0.1%.
Chart Industries delivered a trailing four-quarter average earnings surprise of 75.9%. In the past 60 days, the Zacks Consensus Estimate for GTLS’ 2024 earnings has increased 4.7%.
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Reasons Why IDEX (IEX) Stock Should be in Your Portfolio
IDEX Corporation (IEX - Free Report) stands to benefit from strength across its businesses, acquisitions and focus on operational excellence. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
Image Source: Zacks Investment Research
It has a market capitalization of $17.6 billion. Over the past three months, it has gained 13.1% compared with the industry’s growth of 11.2%. IEX currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: IDEX has been benefiting from the strong performance of the Fire & Safety/Diversified Products (FSDP) segment. Strong momentum in the fire and safety, and Band-It businesses are supporting the FSDP segment. In the fourth quarter of 2023, revenues from the segment totaled $179 million, up 5% year over year.
Also, strength in the industrial business has been supporting the Fluid & Metering Technologies (FMT) segment. In the fourth quarter, FMT segment’s revenues increased 3.9% year over year to $299.1 million.
Accretive Acquisition: IEX believes in adding complementary businesses to its portfolio via acquisitions. In December 2023, the company acquired STC Material Solutions. This 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.
Also, the company’s acquisition of Muon Group in November 2022 expanded 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 remains committed to rewarding its shareholders through dividend payouts. For instance, in 2023, IDEX’s dividend payments totaled $190.7 million, increasing 7.5% year over year. Also, the quarterly dividend rate was hiked by 7% in May 2023.
Strong Liquidity Position: IEX’s strong free cash flow generation capacity should aid it to continue rewarding its shareholders in the quarters ahead. For 2024, it expects free cash flow of more than 100% of net income. It exited 2023 with cash and cash equivalents of $534.3 million, much higher than the current portion of long-term borrowings of $0.6 million. This implies that the company has sufficient cash to meet its current debt.
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 Chart Industries, Inc. (GTLS - Free Report) . While Applied Industrial currently sports a Zacks Rank #1 (Strong Buy), Illinois Tool and Chart Industries 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 up 0.1%.
Chart Industries delivered a trailing four-quarter average earnings surprise of 75.9%. In the past 60 days, the Zacks Consensus Estimate for GTLS’ 2024 earnings has increased 4.7%.