) reached a 52-week high of $122.52 on Monday, Dec 9, 2013.
However, the stock closed at $120.79, representing a one-year
return of about 43.9% and a decent year-to-date return of about
37.8%. Average volume of shares traded over the last three months
stands at approximately 978,306.
Strong balance sheet, strong acquisitions and the company's
ability to consistently raise dividends are some of the growth
catalysts for the company. In addition, the company reported
improved results for the first quarter of 2014.
Parker delivered positive earnings surprises in the last four
quarters with an average beat of 2.94%. This Zacks Rank #2 (Buy)
company has a market cap of $18.03 billion and a long-term
expected earnings growth rate of 9.5%.
Parker has a strong balance sheet and generates a strong cash
flow. Over the past decade, Parker Hannifin has increased its
operating cash flow from just $0.5 billion in 2001 to $1.8
billion in 2013. At the end of the first quarter, Parker's cash
and cash equivalents were $1.94 billion with long-term debt of
$1.5 billion and a debt to capitalization ratio of 19.8% compared
with 20.7% in the last quarter.
The company gives good dividend hikes, reflecting its
commitment to return value to shareholders. For fiscal 2013, the
company has consecutively raised its dividend four times by 5%,
reflecting a yield of 1.5%.
In addition, Parker follows a Win Strategy that primarily aims
to measure customer service excellence through efficient business
and cash management strategies.
Improved 1Q14 Earnings
reported first-quarter fiscal 2014 earnings per share of $1.61,
which was 9.5% above the Zacks Consensus Estimate of $1.47.
Earnings also grew 2.5% year over year driven by incremental
orders in the quarter.
Total revenue in the first quarter increased marginally by
0.6% year over year to $3.23 billion from $3.21 billion in the
year-ago quarter. Weak performance in the American market
continued to affect the company's revenues. However, this was
offset by strong operational performance during the quarter.
Revenues fell marginally short of the Zacks Consensus Estimate of
Further, following the first quarter earnings release, the
company increased its fiscal 2014 guidance. Earnings from
continuing operations for fiscal 2014 are currently expected to
be in the range of $7.78 to $8.38 per share, up from its earlier
guidance of $7.35 to $8.15 per share.
The guidance includes an expected gain of approximately $1.68
per share associated with a previously-announced joint venture
agreement between Parker Aerospace and GE Aviation, an operating
General Electric Company
), and restructuring expenses of approximately $100 million or 47
cents per share.
Over the last 60 days, 4 out of 8 estimates for 2014 have been
revised upward while none moved lower. Thus, the Zacks Consensus
Estimate improved 1.9% to $6.53 per share. For 2015, 4 out of 10
estimates moved upward, helping the Zacks Consensus Estimate
advance 1.7% to $8.18 per share.
The company is confident of delivering a better fiscal 2014.
The company is upbeat about its accretive acquisitions and its
strong balance sheet. Further, the order trends for the company
are also improving. In addition, the company's consistently
strong performance in its Aerospace segment is giving it a good
momentum in that industry with improvement in orders.
Other Stocks to Consider
Other stocks in the machinery and motion control industry that
are currently performing well and have a good visibility include
) with a Zacks Rank #1 (Strong Buy) and
DXP Enterprises, Inc
) that carries a Zacks Rank #2 (Buy).
DXP ENTERPRISES (DXPE): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
PARKER HANNIFIN (PH): Free Stock Analysis
XYLEM INC (XYL): Free Stock Analysis Report
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