IDEX Corporation IEX has impressed investors with its recent earnings streak, having surpassed estimates in each of the four trailing quarters. The company’s share price performance reflects investor optimism over the stock. In the past six months, the company has gained 13.9%, outperforming the industry’s growth of 10.8%.
The stock currently carries a Zacks Rank #2 (Buy).We believe that its notable traction across markets will drive growth in the upcoming quarters.
Factors at Play
IDEX is well poised to gain from a diversified business structure, solid product portfolio, execution abilities and favorable tax impacts. The long-term prospects of the company remain solid. Also, its industrial, life science and municipal end markets are seeing strength. Notably, for 2019, the company’s organic sales are projected to grow 4-5% year over year.
Also, acquisitions have been IDEX's preferred mode of business expansion. In this regard, the buyouts of the intellectual property assets of Phantom Controls (June 2018) and Finger Lakes Instrumentation (July 2018) are worth mentioning. Phantom Controls has been strengthening the company's water-flow offerings under Akron Brass, Hale Products brands. Also, the Finger Lakes buyout has been solidifying the company's Health & Science business.
Moreover, IDEX’s healthy cash flow allows management to return higher values to shareholders. Notably, in the first quarter of 2019, the company repurchased 370,000 shares for $51.7 million and distributed dividends totaling $33 million. The quarterly dividend rate currently stands at 50 cents per share (hike of 16% was announced in May 2019). We believe that further share buybacks will help in improving the bottom line.
In addition, IDEX’s earnings estimates have been trending north over the past month, with nine upward estimate revisions for 2019. Notably, the Zacks Consensus Estimate for 2019 earnings is pegged at $5.82, higher than $5.73 recorded in a month ago.
Other Stocks to Cosider
Some other top-ranked stocks from the same industry are Roper Technologies, Inc. ROP, Dover Corporation DOV and Flowserve Corporation FLS. While Roper sports a Zacks Rank #1 (Strong Buy), Dover and Flowserve carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Roper surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 8.43%.
Dover surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 8.61%.
Flowserve outpaced estimates twice in the preceding four quarters, the average earnings surprise being 0.49%.
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