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Why Should You Add TE Connectivity (TEL) to Your Portfolio
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Over the past six months, shares of connectivity and sensor solutions manufacturer, TE Connectivity Ltd. (TEL - Free Report) , gained 19.6% compared to the Zacks classified Electronic Miscellaneous Components industry average of 15.1%. With a string of earnings beats over the past five quarters, the company has an impressive surprise history.
During the last reported quarter, it continued with its earnings streak, with earnings per share of $1.15 topping the Zacks Consensus Estimate by 15.0%. Also, the Zacks Rank #2 (Buy) company’s upbeat guidance for fiscal 2017, signals bright days ahead.
Further, the Zacks Rank #2 (Buy) company still boasts robust fundamentals and is seeing improving prospects. This is reflected in analysts’ opinion as well, as the company has been witnessing solid activity on the earnings estimate revision front. Here we have listed 5 reasons why we believe that TE Connectivity has plenty of upside left:
Earnings per Share Growth: The company has achieved a remarkable average earnings growth of 55.6% in the last five years, miles ahead of the 29.8% growth of the industry. TE Connectivity also has an impressive projected EPS growth of 30.2% for the current year, in comparison to the industry’s 26.2% growth.
Superior ROA: TE Connectivity’s Return on Assets (ROA) ratio is 19.3%, almost five times higher than that of the industry average. This indicates that the company uses its capital more efficiently and profitably as compared with the industry.
Analyst Sentiment Positive: Analysts have become increasingly bullish on the company over the past month, as the Zacks Consensus Estimate for fiscal 2017 earnings sharply trended up over the same time frame, from $4.35 to $4.42, on the back of five upward estimate revisions. Current quarter estimates have also trended up during the same time frame, rising 2.9% to $1.07.
Impressive VGM Score: TE Connectivity also has a Zacks VGM score of ‘A’. Our VGM Score identifies stocks that have the most attractive value, growth and momentum characteristics, and a good VGM score indicates stronger chances of success. Our research shows that stocks with Style Scores of ‘A’ or ‘B,’ when combined with Zacks Rank #1 or #2 (Buy), offer the best upside potential. (You can read more about the Zacks Style Scores here>>).
Growth Catalysts: TE Connectivity is the market leader in the connectivity and sensor business, armed with a comprehensive portfolio. About 80% of TE Connectivity’s revenues are driven by harsh environment applications. Going forward, the company believes that this business will provide ample opportunities for margin expansion. The company’s transportation business, which has been its strongest growth catalyst for most of fiscal 2016, is expected to grow in mid-single digits for fiscal 2017.
Other two businesses of the company, Industrial and Communications Solutions, which lagged behind the transportation business in the past, have been displaying signs of recovery. Entering into 2017, TE Connectivity believes that the operating margin expansion will be driven by all three segments, with more contribution from Communications and Industrial. While buyouts of Creganna and Intercontec are expected to stoke growth for the Industrial segment, the SubCom business line is likely to fuel growth for the Communications segment.
Coherent beat estimates in all of the trailing four quarters and has an average surprise of 11.9%.
Rogers has an average earnings surprise of 37.2%, beating estimates each time in the trailing our quarters.
OSI Systems has managed to beat earnings thrice over the trailing four quarters. It has an average surprise of 12.9%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Why Should You Add TE Connectivity (TEL) to Your Portfolio
Over the past six months, shares of connectivity and sensor solutions manufacturer, TE Connectivity Ltd. (TEL - Free Report) , gained 19.6% compared to the Zacks classified Electronic Miscellaneous Components industry average of 15.1%. With a string of earnings beats over the past five quarters, the company has an impressive surprise history.
During the last reported quarter, it continued with its earnings streak, with earnings per share of $1.15 topping the Zacks Consensus Estimate by 15.0%. Also, the Zacks Rank #2 (Buy) company’s upbeat guidance for fiscal 2017, signals bright days ahead.
Further, the Zacks Rank #2 (Buy) company still boasts robust fundamentals and is seeing improving prospects. This is reflected in analysts’ opinion as well, as the company has been witnessing solid activity on the earnings estimate revision front. Here we have listed 5 reasons why we believe that TE Connectivity has plenty of upside left:
Earnings per Share Growth: The company has achieved a remarkable average earnings growth of 55.6% in the last five years, miles ahead of the 29.8% growth of the industry. TE Connectivity also has an impressive projected EPS growth of 30.2% for the current year, in comparison to the industry’s 26.2% growth.
Superior ROA: TE Connectivity’s Return on Assets (ROA) ratio is 19.3%, almost five times higher than that of the industry average. This indicates that the company uses its capital more efficiently and profitably as compared with the industry.
Analyst Sentiment Positive: Analysts have become increasingly bullish on the company over the past month, as the Zacks Consensus Estimate for fiscal 2017 earnings sharply trended up over the same time frame, from $4.35 to $4.42, on the back of five upward estimate revisions. Current quarter estimates have also trended up during the same time frame, rising 2.9% to $1.07.
Impressive VGM Score: TE Connectivity also has a Zacks VGM score of ‘A’. Our VGM Score identifies stocks that have the most attractive value, growth and momentum characteristics, and a good VGM score indicates stronger chances of success. Our research shows that stocks with Style Scores of ‘A’ or ‘B,’ when combined with Zacks Rank #1 or #2 (Buy), offer the best upside potential. (You can read more about the Zacks Style Scores here>>).
Growth Catalysts: TE Connectivity is the market leader in the connectivity and sensor business, armed with a comprehensive portfolio. About 80% of TE Connectivity’s revenues are driven by harsh environment applications. Going forward, the company believes that this business will provide ample opportunities for margin expansion. The company’s transportation business, which has been its strongest growth catalyst for most of fiscal 2016, is expected to grow in mid-single digits for fiscal 2017.
Other two businesses of the company, Industrial and Communications Solutions, which lagged behind the transportation business in the past, have been displaying signs of recovery. Entering into 2017, TE Connectivity believes that the operating margin expansion will be driven by all three segments, with more contribution from Communications and Industrial. While buyouts of Creganna and Intercontec are expected to stoke growth for the Industrial segment, the SubCom business line is likely to fuel growth for the Communications segment.
Other Stocks to Consider
Some other notable stocks in the Electronics - Miscellaneous Components industry include Coherent, Inc. (COHR - Free Report) , Rogers Corporation (ROG - Free Report) and OSI Systems, Inc. (OSIS - Free Report) . All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Coherent beat estimates in all of the trailing four quarters and has an average surprise of 11.9%.
Rogers has an average earnings surprise of 37.2%, beating estimates each time in the trailing our quarters.
OSI Systems has managed to beat earnings thrice over the trailing four quarters. It has an average surprise of 12.9%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>