On Jan 9, we issued an updated research report on MRC Global Inc. (MRC - Free Report) .
The company, with market capitalization of roughly $1.1 billion, currently sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past three months, the company’s share price has increased 27.9% compared with the industry’s rise of 15.1%. Also, its earnings estimates of 61 cents per share for 2019 and 76 cents for 2020 suggest year-over-year growth of 7% and 24.5%, respectively.
Factors Benefiting the Company
MRC Global is likely to continue benefiting from its diversified business structure and large customer base, which are spread across various industries, including exploration, production, and extraction of underground oil and natural gas. Moreover, the company’s launch of MRC Global Online — digital supply-chain solutions — will make purchases easier for PVFs products.
Also, the company has been benefiting from lucrative contract wins and projects. During the second and third quarter of 2019, the company added new customers, including CenterPoint Energy, Inc. (CNP - Free Report) , and EnLink Midstream, LLC (ENLC - Free Report) while few customers like ConocoPhillips (COP - Free Report) renewed contracts. Also, some multiple-year contracts have been proving beneficial. Moreover, projects in the Permian basin and construction of valve modification facility will be beneficial. The company anticipates generating roughly 40% of revenues from valves in the near future.
Also, MRC Global’s cash position has improved, as evident from $134 million of net cash generated from operating activities in the first nine months of 2019 against $146 million used a year ago. In fact, the company expects to generate a minimum of $200 million of cash from operating activities in 2019.
Moreover, MRC Global remains highly committed toward increasing shareholders’ wealth through share repurchase programs and paying dividends. For instance, in the first nine months of 2019, the company used $63 million for repurchasing shares and $18 million for paying dividends.
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