Shares of Gorman-Rupp Co. (GRC) scaled a new 52-week high of $35.86 during its trading session on Jun 17.
Gorman-Rupp closed the session at $35.55, reflecting a year-to-date return of 6.9%. The trading volume for the session was 0.16 million shares. Earnings estimate revisions for 2014 and 2015 and an expected earnings growth rate of 10.0% for the next five years indicate further upward potential for this diversified machinery company.
A series of events in the past few months boosted investors’ confidence in Gorman-Rupp. Of these, the acquisition of the business of Bayou City Pump, Inc. by the company’s subsidiary, National Pump Company is worth mentioning. The transaction, completed in the first week of Jun 2014, added approximately $16 million of revenue generation capacity to Gorman-Rupp.
The company’s acquisition was consistent with its policy to enhance business and improve profitability. Gorman-Rupp, over time, has rewarded its shareholders through regular dividend payments. In Jun 2014, the company paid its 257th quarterly dividend, amounting to 9 cents per share.
Also, Gorman-Rupp exhibited a strong performance in first-quarter 2014. Earnings came in at 38 cents per share, up 35.7% from the Zacks Consensus Estimate of 28 cents. The bottom-line results increased 72.7% year over year.
Revenues rose 19.0% year over year due to strong sales in water end and non-water end markets. Geographically, domestic sales increased 28% while international sales grew by 5.3%. Gross margin was up by 200 basis points to 25.0%.
Estimate Revisions Show Potency
In the last 60 days, the Zacks Consensus Estimate for Gorman-Rupp has gone up 9.4% to $1.52 for 2014 and increased 6.3% for 2015. The Zacks Consensus Estimate also reflects year-over-year growth of 21.6% for 2014 and 11.2% for 2015.
Gorman-Rupp currently has a $933.3 million market capitalization and sports a Zacks Rank #1 (Strong Buy). Other stocks worth considering in the industry include Blount International Inc. (BLT), Illinois Tool Works Inc. (ITW) and Nordson Corporation (NDSN). All these companies carry a Zacks Rank #2 (Buy).