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Emerson (EMR) to Distribute Dixell Products in United States

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In a bid tostrengthen itscold chain management capabilities, Emerson Electric Co. (EMR - Free Report) recently announced the finalization of an agreement with Weiss Instruments, LLC. The financial details of the deal were kept under wraps.

In the United States, Weiss Instruments has operated as Dixell controls’ third-party authorized distributor for more than two decades. Per the latest deal, Emerson will now directly serve the customers of its Dixell products by streamlining their access to Dixell-branded controls in the market of North America. Notably, the agreement does not include the core Weiss Instruments business, which will continue to operate as an independent company. Emerson’s Dixell brand is touted as a global leader in microprocessor based electronic regulation, pressure and humidity controls for commercial refrigeration as well as air conditioning. Therefore, the direct offering and management of the Dixell products is likely to boost Emerson’s ability of delivering portfolio of products and solutions to its customers.

Notably, the direct management of the Dixell products will facilitate the delivery of comprehensive customer solutions leveraging the portfolio of customized, packaged, programmable as well as building-level controls in the refrigeration, healthcare, air conditioning, industrial, and pharmaceutical industries.

Our Take

Emerson’s growth momentum is being driven by favorable trends in energy-related, hybrid and general industrial markets as well as strong demand in the HVAC and refrigeration markets. Also, the company is expected to benefit from global infrastructure growth as its core businesses hold dominant positions in the markets tied to energy efficiency and infrastructure spending. In the past three months, this Zacks Rank #2 (Buy) stock has gained 5.6%, outperforming 0.2% growth recorded by the industry.

 

Meanwhile, the company remains enthusiastic about the prospects of its Commercial & Residential Solutions segment as it is witnessing improving trends in the United States, Europe and Asian construction markets. For instance, in the fiscal first quarter of 2018, the company’s Automation Solutions platform reported an impressive 30.8% year-over-year growth. For the Automation Solutions segment, favorable trends in power and life sciences, and improving MRO demand are anticipated to boost growth.

Additionally, the company remains focused on launching new products and technologies that enables it to broaden its customer base and gain market traction. This apart, Emerson has a solid history of clinching lucrative contracts in the energy infrastructure, which is a positive for the company.

Other Stocks to Consider

Some other top-ranked stocks from the same space are Applied Industrial Technologies, Inc. (AIT - Free Report) , Cimpress N.V (CMPR - Free Report) and Deere & Company (DE - Free Report) . While Applied Industrial Technologies and Cimpress sport a Zacks Rank #1 (Strong Buy), Deere & Company carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Industrial Technologies has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 11%.

Cimpress has outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 65.2%.

Deere & Company has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 17.3%.

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