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Dover (DOV) Hits 52-Week High: What's Driving the Stock?

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Shares of Dover Corporation DOV scaled a fresh 52-week high of $84.40 on May 22, before closing the day at $83.15. Shares of this producer of wide range of specialized industrial products and manufacturing equipment rallied on the back of solid prospects, expected benefits from acquisitions, as well as robust hygienic and pharma markets.

The company has a market cap of $13 billion. Dover’s earnings beat the Zacks Consensus Estimate in three out of the trailing four quarters, with an average positive surprise of 1.17%. The average volume of shares traded over the last three months was roughly 1.33M.

Dover Corporation Price and Consensus


Dover Corporation Price and Consensus | Dover Corporation Quote

The stock delivered a solid one-year return of around 26.5%. Dover’s shares have also outperformed the Zacks categorized Machinery - General Industrial industry over the past six months. The company’s shares have gained 15.1%, while the industry recorded growth of 11.5% in the same time frame.

Growth Drivers

Notably, Dover’s top and bottom lines registered year-over-year growth in first-quarter 2017, surpassing the Zacks Consensus Estimate. Dover raised its revenue and EPS guidance for full-year 2017, driven by sound first-quarter performance, higher expectations in the Energy segment, and overall strong bookings activity.

The company guides adjusted earnings per share in the range of $4.05–$4.20 for 2017. It also anticipates full-year revenue growth in the band of 11–13%.

Within the Energy segment, Dover anticipates that stronger-than-expected U.S. rig count deployment, along with increasing well-completion activity, will result in higher full-year revenue growth. In Engineered Systems, it expects the Printing & Identification platform to deliver solid performance consistently, backed by its unique position in the digital textile market, and focus on consumables in marking and coding.

Within Fluids, Dover foresees majority of its businesses to remain robust, including retail fueling, hygienic and pharma and other industrial markets. The strong overall growth rate in this segment will be primarily driven by Dover Fueling Solutions, where the U.S. is growing nicely and European markets are also improving.

In addition, Dover will benefit from the successful acquisitions in diverse end markets. During fourth-quarter 2016, the company closed the Rav and Wayne acquisition. Overall, it closed three acquisitions in 2016, including the Tokheim acquisition.

Dover’s recent acquisition of France-based software company – Caldera Graphics – will fortify its position in digital textile printing. The company expects to ink several deals over the next few quarters in its key growth markets. Additional acquisitions will continue to fuel growth.

Dover currently carries a Zacks Rank #3 (Hold).

Key Picks

Better-ranked stocks in the same space include AGCO Corp. (AGCO - Free Report) , Altra Industrial Motion Corp. AIMC and Applied Industrial Technologies, Inc. AIT. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO has a remarkable positive average earnings surprise of 40.39% for the last four quarters. Altra Industrial Motion generated a positive average earnings surprise of 15.93% over the trailing four quarters. Applied Industrial Technologies has delivered an average positive earnings surprise of 9.78% in the past four quarters.

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