Altra Industrial Motion Corp. AIMC currently boasts promising prospects on strength in its end markets, solid product portfolio, robust liquidity position and a sound capital-deployment strategy.
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The Zacks Rank #2 (Buy) company has a market capitalization of $4 billion. Over the past year, it has gained 56.1% compared with the industry’s growth of 26%.
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Solid End Markets: Altra Industrial has been experiencing strength across its specialty machinery, heavy-duty trucks, transportation medical, turf & garden, agriculture, construction, material handling, aerospace and defense, renewable energy and factory automation. The company’s solid product portfolio, pricing actions and supply-chain initiatives, along with its solid orders and a healthy backlog, are likely to be beneficial in the quarters ahead. For 2021, it projects sales of $1,890-$1,920 million, higher than $1,820-$1,850 million estimated earlier.
Healthy Liquidity Position: The company’s strong cash position adds to its strength. For instance, its free cash flow in the first half of 2021 was $56 million, and its cash and cash equivalents were $277.8 million. Exiting the second quarter of 2021, Altra Industrial’s liquidity included $278 million of available cash and $296 million of liquidity under its credit line. For 2021, it anticipates generating free cash flow of $210-$235 million, up from $200-$225 million projected earlier.
Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts. In the first six months of the year, the company paid out dividends of $7.8 million. Also, in May 2021, its board of directors hiked the company’s quarterly dividend rate by 33.3%.
Estimate Trend: In the past 30 days, analysts have increasingly become bullish on the company, as evident from positive earnings estimate revisions. The Zacks Consensus Estimate for its 2021 earnings has trended up from $3.24 to $3.44 on two upward estimate revisions versus none downward. In addition, over the same timeframe, the consensus estimate for 2022 earnings has trended up from $3.65 to $3.88 on two upward estimate revisions against none downward.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Kadant Inc. KAI, Applied Industrial Technologies, Inc. AIT and Dover Corporation DOV. While Kadant currently sports a Zacks Rank #1 (Strong Buy), Applied Industrial and Dover carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant delivered an earnings surprise of 22.26%, on average, in the trailing four quarters.
Applied Industrial delivered an earnings surprise of 30.33%, on average, in the trailing four quarters.
Dover delivered an earnings surprise of 17.59%, on average, in the trailing four quarters.
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Dover Corporation (DOV): Free Stock Analysis Report
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Altra Industrial Motion Corp. (AIMC): Free Stock Analysis Report
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