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Here's Why You Should Hold Delphi Technologies (DLPH) Now
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Delphi Technologies PLC has an expected long-term earnings per share (three to five years) growth rate of 9%. Further, earnings are expected to register 14% growth in 2020.
Let’s delve deeper into the company’s positives, which justify its retention in investors’ portfolio.
A Look at the Positives
Delphi Technologies, a $1.06 billion technology services company, has a geographically diverse revenue base. The company operates in 24 countries, managing technical centers, manufacturing sites and customer support services. Region-wise, it derived 44% of revenues from Europe, 28% from North America, 25% from the Asia Pacific and 3% from South America in 2018.
Regional presence coupled with its diversified and innovative product portfolio with updated technologies makes Delphi Technologies a solid choice for original equipment manufacturers (OEMs). This is because OEMs are focused on increasing efficiency and expanding their global manufacturing footprint by choosing suppliers with global scale who can easily adapt to regional variations. In 2018, within the Powertrain Systems segment, 72% of net sales came from light vehicle OEM customers and 28% from commercial vehicle OEM customers.
Furthermore, the company’s aftermarket business continues to generate stable recurring revenues. Through its aftermarket product portfolio, it offers an extensive range of solutions, which include fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics categories, to leading aftermarket companies, including independent retailers and wholesale distributors.
Risks
In spite of significant growth prospects, Delphi Technologies is not free from headwinds. The company’s operation in the global automotive component supply industry remains a major concern. The industry is subject to stiff competition, rapid technological changes, short product life cycles and cyclical consumer demand patterns. High debt may limit the company’s future expansion and worsen its risk profile. Seasonality causes considerable fluctuations in revenues and profits and makes forecasting difficult.
A few better-ranked stocks in the broader Zacks Business Services sector are Blucora , Booz Allen Hamilton (BAH - Free Report) and S&P Global (SPGI - Free Report) . While Blucora and Booz Allen Hamilton sport a Zacks Rank #1, S&P Global carries a Zacks Rank #2 (Buy). Long-term expected EPS (three to five years) growth rate for Blucora, Booz Allen Hamilton and S&P Global is 20%, 13% and 10%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Here's Why You Should Hold Delphi Technologies (DLPH) Now
Delphi Technologies PLC has an expected long-term earnings per share (three to five years) growth rate of 9%. Further, earnings are expected to register 14% growth in 2020.
Let’s delve deeper into the company’s positives, which justify its retention in investors’ portfolio.
A Look at the Positives
Delphi Technologies, a $1.06 billion technology services company, has a geographically diverse revenue base. The company operates in 24 countries, managing technical centers, manufacturing sites and customer support services. Region-wise, it derived 44% of revenues from Europe, 28% from North America, 25% from the Asia Pacific and 3% from South America in 2018.
Regional presence coupled with its diversified and innovative product portfolio with updated technologies makes Delphi Technologies a solid choice for original equipment manufacturers (OEMs). This is because OEMs are focused on increasing efficiency and expanding their global manufacturing footprint by choosing suppliers with global scale who can easily adapt to regional variations. In 2018, within the Powertrain Systems segment, 72% of net sales came from light vehicle OEM customers and 28% from commercial vehicle OEM customers.
Furthermore, the company’s aftermarket business continues to generate stable recurring revenues. Through its aftermarket product portfolio, it offers an extensive range of solutions, which include fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics categories, to leading aftermarket companies, including independent retailers and wholesale distributors.
Risks
In spite of significant growth prospects, Delphi Technologies is not free from headwinds. The company’s operation in the global automotive component supply industry remains a major concern. The industry is subject to stiff competition, rapid technological changes, short product life cycles and cyclical consumer demand patterns. High debt may limit the company’s future expansion and worsen its risk profile. Seasonality causes considerable fluctuations in revenues and profits and makes forecasting difficult.
Zacks Rank & Stocks to Consider
Delphi Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked stocks in the broader Zacks Business Services sector are Blucora , Booz Allen Hamilton (BAH - Free Report) and S&P Global (SPGI - Free Report) . While Blucora and Booz Allen Hamilton sport a Zacks Rank #1, S&P Global carries a Zacks Rank #2 (Buy). Long-term expected EPS (three to five years) growth rate for Blucora, Booz Allen Hamilton and S&P Global is 20%, 13% and 10%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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