EnPro Industries Inc’s NPO innovation investments, acquisition strategies, shareholder- friendly policies and healthy end-markets conditions make it a solid bet for investors now.
It currently sports a Zacks Rank #1 (Strong Buy).
In the last three months, the company’s shares have yielded 4.2% return, outperforming 2.1% gain recorded by the industry it belongs to.
Why the Upgrade?
Despite weak year-over-year comparisons recorded in second-quarter 2017, EnPro Industries’ impressive results for the first half of 2017 and bright prospects seem to have created positive sentiments for the stock. In the first half, adjusted earnings per share surged 52.5% while earnings before interest, tax, depreciation and amortization (EBITDA) grew 18.5%. Also, the company received district court’s approval for reorganization of certain subsidiaries.
In the quarters ahead, we believe that EnPro Industries’ is poised to gain from initiatives to innovate new products and improve operational efficiency. Projects started in the second quarter include endurance testing of the OP 2.0 engine and enhancement of product offerings in food and pharma business. Moreover, the company believes in rewarding shareholders handsomely through dividend payments and share buybacks. Also, investments for addition of capital assets and acquiring meaningful businesses remain a priority.
For 2017, healthy operating conditions expected in the semiconductor, food & pharma, oil & gas, refining & processing and general industrial will be advantageous. Also, the acquired assets of Qualiseal Technology (June 2017) will strengthen Technetics Group’s mechanical seals product offerings in the aerospace industry. Technetics Group is a unit of EnPro Industries. Based on these positive, the company increased its adjusted EBITDA guidance to $200-$205 million from the previous projection of $193-$198 million.
Solid prospects have driven positive revisions in earnings estimates for the stock. Over the last 60 days, the Zacks Consensus Estimate for the company increased 5.2% to $3.05 for 2017 and 16.1% to $3.75 for 2018.
EnPro Industries Price and Consensus
EnPro Industries Price and Consensus | EnPro Industries Quote
Other Stocks to Consider
EnPro Industries has a market capitalization of approximately $1.6 billion. Other stocks worth considering in the industry include Kadant Inc. KAI, Sun Hydraulics Corporation SNHY and Barnes Group, Inc. B. While both Kadant and Sun Hydraulics sport a Zacks Rank #1, Barnes Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant’s earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company delivered an average positive earnings surprise of 19.29% in the last four quarters.
Sun Hydraulics pulled off an average positive earnings surprise of 3.47% for the last four quarters. Also, its earnings estimates for 2017 and 2018 improved in the last 60 days.
Barnes Group’s earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 11.60%.
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