U.S. Markets close in 5 hrs 28 mins

Why You Should Consider Regal Beloit (RBC) Stock Right Now

Zacks Equity Research
1 / 2

Has Waste Management (WM) Outpaced Other Business Services Stocks This Year?

Is (WM) Outperforming Other Business Services Stocks This Year?


Regal Beloit Corporation RBC has managed to impress investors with its stellar performance backed by the company’s organic growth through innovative products, diverse customer base as well strategic investments in emerging markets. Moreover, Regal Beloit is gaining traction from its Commercial and Industrial Systems segment buoyed by strength in commercial HVAC (heating, ventilation and air conditioning), and oil & gas and power generation.


In the past six months, the company has gained 6% against the industry’s decline of 4.7%, reflecting investor optimism surrounding the stock. We believe Regal Beloit, which enjoys a strong foothold across markets, has several key catalysts working in its favour. Let’s delve deeper and find out more.

Factors at Play

Regal Beloit’s long-term growth strategy involves organic growth through broadening customer base and exploitation of new opportunities in emerging markets. Over the years, the company has successfully consolidated its product lines and streamlined product brands to evolve as a dynamic enterprise. Notably, it has been manufacturing, sales and service facilities throughout the United States, Canada, Mexico, Europe and Asia. Also, Regal Beloit markets its products to a diversified customer base across the world, including OEMs, distributors and end users.

Moreover, of late, the company’s Commercial and Industrial Systems segment is witnessing impressive momentum.  For instance, in first-quarter 2018, sales at the segment recorded an increase of 8.6% year over year. Additionally, we believe the company’s robust operating platform and an efficient management team will help in the execution of its strategic priorities and drive net asset value.

Meanwhile, this Zacks Rank #1 (Strong Buy) company’s ability to generate solid free cash is encouraging. This, in turn, lends Regal Beloit an opportunity to pursue accretive acquisitions and unlock additional value. Therefore, the company is on a constant lookout for an M&A activity as part of its overall growth strategy. For 2018, Regal Beloit expects organic growth in low single digits along with healthy demand trends. This apart, it remains confident about generating robust operating cash flow to fund the company’s organic and inorganic growth as well as to return significant capital to shareholders going ahead.

Other Stocks to Consider

Some other top-ranked stocks from the same space are Franklin Electric Co., Inc. FELE, Capstone Turbine Corporation CPST and Roper Technologies, Inc. ROP. All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franklin Electric surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 5.27%.

Capstone Turbine outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 37.50%.

Roper Technologies exceeded estimates in the preceding four quarters, with an average positive earnings surprise of 2.95%.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.