IDEX's (IEX) 5.9% Gain in One Year Raises Longevity Questions
IDEX Corporation IEX appears in good shape, with its shares rallying 5.9% over the past year. The company is gaining from its solid product portfolio, execution abilities and growth investments (including increased exposure in emerging markets, productivity enhancement and digitization).
What’s Aiding IEX?
IEX’s Fluid & Metering Technologies segment is benefiting from strength in industrial, water, energy and chemical end markets. Solid business in the automotive end market and an improving trend in electrification are driving revenues at the Health & Science Technologies segment. Also, favorable price-cost and accretive acquisitions bode well for the segment. Strong BAND-IT performance across industrial energy and automotive end markets is supporting the Fire, Safety & Diversified product segment.
IDEX has been strengthening and expanding its businesses through asset additions for a while. The Iridian Spectral (May 2023) buyout expanded IDEX’s wide array of optical technology offerings. Iridian is part of IDEX Optical Technologies within the Health & Science Technology segment.
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The acquisition of Muon Group in November 2022, expanded IDEX’s growing platform of precision technology business within the Health & Science Technologies segment. In May 2022, IDEX completed the acquisition of KZValve. The inclusion of KZValve’s expertise in waterproof motorized valve solutions, supported by its strong product portfolio and innovative capabilities, boosted fluid management solutions in IDEX’s Banjo Corporation business.
The company utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In 2022, the company distributed dividends totaling $177.4 million and repurchased common stocks worth $148.1 million. In the first three months of 2023, dividend payments totaled $45.5 million. The quarterly dividend rate currently stands at 64 cents per share (a hike of 7% was announced in May 2023).
Will the Trend Last?
IDEX’s diversified business structure is a boon for the company. Solid orders, backlog levels and pricing actions are expected to be beneficial in the near term. Strong free cash flow generation capacity will likely aid the company to continue rewarding its shareholders in the quarters ahead. For 2023, IEX expects a free cash flow of approximately 100% of its net income.
Zacks Rank & Stocks to Consider
IEX currently carries a Zacks Rank #3 (Hold). Some top-ranked companies from the Industrial Products sector are discussed below:
Ingersoll Rand Inc. IR presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 7.5%. The stock has improved 21.5% in the past year.
Alamo Group Inc. ALG presently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 47.2% in the past year.
Axon Enterprise AXON sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 44.4%, on average.
In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 90.2% in the past year.
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Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
IDEX Corporation (IEX) : Free Stock Analysis Report
Alamo Group, Inc. (ALG) : Free Stock Analysis Report
Axon Enterprise, Inc (AXON) : Free Stock Analysis Report
