Roper Technologies, Inc. ROP has impressed investors with its recent earnings streak, having surpassed estimates all through in the trailing four quarters. The company’s share price increase reflects its impressive performance, exhibiting investor optimism over the stock. Over the past three months, the company has gained 7.1% against the industry’s decline of 0.8%.
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 to Consider
Roper expects its solid SaaS and subscription revenue stream, and strength in Strata business businesses to drive Application Software segment. Also, strength in DAT, MHA, RF IDeas and TransCore businesses, along with Foundry acquisition (closed in April 2019), will likely boost the top line of Network Software & Systems segment. Moreover, solid demand for optical measurement systems and consumables coupled with new product launches, might keep boosting revenues of the company's Measurement & Analytical Solutions segment. Notably, Roper has raised organic revenue growth guidance for 2019 to 4-5% from 3-5% predicted earlier.
Also, the company expects stronger sales, benefits of its unique niche market strategy and gains from acquired assets to continue driving its profitability. Notably, Roper raised its 2019 adjusted earnings guidance from $12-$12.40 per share to $12.70-$13.00.
Moreover, the company remains committed to rewarding shareholders handsomely through dividend payments. It is worth mentioning here that Roper increased the quarterly dividend rate by 12% in November 2018. On an annualized basis, the dividend increased to $1.85 from $1.65 per share. We believe that such initiatives are reflective of a strong cash position.
In addition, analysts have become increasingly bullish on Roper. In the past couple of months, the Zacks Consensus Estimate for both 2019 and 2020 earnings has trended up.
Other Key Picks
Some other top-ranked stocks in the same space are RBC Bearings Incorporated ROLL, Dover Corporation DOV and Flowserve Corporation FLS. All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RBC Bearings surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 8.36%.
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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