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Dover Scales New 52-Week High: What's Driving the Stock?

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Shares of Dover Corporation (DOV - Free Report) scaled a fresh 52-week high of $112.20 during trading session on Nov 25, before retracting a bit to close at $111.95. Stellar third-quarter 2019 performance and an encouraging 2019 outlook have contributed to this rally.

Dover, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $15.9 billion. The company has an expected long-term earnings per share growth rate of 11.5%. Dover surpassed the Zacks Consensus Estimate in the trailing four quarters, the average positive beat being 6.70%.

Dover’s shares have gained 34.3% over the past year, outperforming the industry’s growth of 19.3%.

Driving Factors

Dover’s third-quarter 2019 adjusted earnings and revenues climbed 18% and 4.5% respectively, on a year-over-year basis. The metrics also beat their respective Zacks Consensus Estimate. The company’s performance benefited from acquisition as well as organic growth and solid operational execution.
Dover’s fourth-quarter 2019 results are likely to reflect its robust order backlog as well as execution of margin targets. In addition, impressive performance in the Engineered Systems and Fluids segments, along with benefits from cost-containment actions, footprint-optimization projects and retail refrigeration, will negate the impact of soft demand in the Refrigeration & Food Equipment segment.
The company projects adjusted EPS at $5.82-$5.85 for the current year. The mid-point of the guidance suggests 17% year-over-year growth. The guidance reflects solid order backlog across all business segments, productivity and cost initiatives, and execution of margin targets.

The company has executed restructuring programs to better align costs and operations with current market conditions through targeted facility consolidations, headcount reduction and other measures. Dover also has a long tradition of making successful acquisitions in diverse end markets. The company will also gain from product digitization, e-commerce, new product development, and inorganic investment in core business platforms.

Positive Growth Projections

Analysts are steadily growing bullish on the stock. Over the last 60 days, the Zacks Consensus Estimate for the company moved 0.3% north to $5.85 for 2019. For 2020, the Zacks Consensus Estimate for earnings moved up 0.5% to $6.32, during the same time frame.
The Zacks Consensus Estimate for Dover’s 2019 earnings is currently pegged at $5.85, reflecting expected year-over-year growth of 17.7%. The same for 2020 is pinned at $6.32, indicating a year-over-year rise of 8.1%.

Stock to Consider

Some better-ranked stocks in the Industrial Products sector are Northwest Pipe Company (NWPX - Free Report) , Tennant Company (TNC - Free Report) and Casella Waste Systems, Inc. (CWST - Free Report) . While Northwest Pipe and Tennant sport a Zacks Rank #1 (Strong Buy), Casella Waste Systems carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northwest Pipe has an expected earnings growth rate of 15.8% for the current year. The stock has appreciated 43.4% in a year’s time.

Tennant has a projected earnings growth rate of 29.8% for 2019. The company’s shares have rallied 21.9% over the past year.

Casella Waste Systems has an estimated earnings growth rate of 37.7% for the ongoing year. The company’s shares have gained 41.6% in the past year.

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