Reasons to Retain RBC Bearings (RBC) Stock in Your Portfolio
RBC Bearings Incorporated RBC is aided by strength in the Industrial and Aerospace/Defense segments, and accretive acquisitions despite softness in the semiconductor market and the rising cost of sales.
What’s Aiding RBC?
Business Strength: Recovery in build rates from large OEMs (original equipment manufacturer) and stability in the aftermarket are driving RBC’s Aerospace/Defense segment. Strength in the food and beverage, mining, energy and general industrial end markets buoys optimism for the Industrial segment.
Expansion Efforts: RBC has expanded its reach with the acquisition of Carson City, NV-based precision bearings manufacturer Specline, Inc. in August 2023. Specline’s unique bearing and manufacturing processes expanded RBC Bearings’ aerospace product offerings and boosted the company’s production capacity.
Product Development Initiatives: The company is well-poised to benefit from its product development initiatives and robust demand for large planes like the Airbus 737, 787, A320 and A330 in the quarters ahead. Additional volume increases, driven by RBC Bearings’ space initiatives, are also likely to be beneficial.
Rewards to Shareholders: RBC’s measures to reward its shareholders through dividend payments are noteworthy. In the first six months of fiscal 2024 (ended September 2023), the company paid dividends of $11.5 million and repurchased shares for $7 million, increasing 17.3% year over year.
In light of the above-mentioned positives, we believe, investors should retain RBC stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past year, shares of the company have gained 17.3% compared with the industry’s 13% increase.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Flowserve Corporation FLS presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 3.3%. The stock has risen 49% in the past year.
Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 13.9%.
The consensus estimate for AIT’s fiscal 2024 earnings has increased 3.7% in the past 60 days. Shares of Applied Industrial have jumped 31% in the past year.
A. O. Smith Corporation AOS currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the consensus estimate for A. O. Smith’s 2023 earnings has improved 5%. The stock has risen 28.7% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
A. O. Smith Corporation (AOS) : Free Stock Analysis Report
RBC Bearings Incorporated (RBC) : Free Stock Analysis Report
Flowserve Corporation (FLS) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
