Worthington Industries, Inc.
(
WOR
) recently had a solid fourth quarter report stemming from a strong
performance out of its pressure cylinder business. The Ohio-based
metal processor beat the Zacks Consensus Estimate by 42.6% in the
quarter, marking its fourth positive earnings surprise over the
last six quarters. With a price-to-sales (P/S) ratio of just 0.6,
this Zacks #1 Rank (Strong Buy) is a good play for value investors.
Huge Beat in 4Q
Worthington reported strong fourth-quarter fiscal 2012 results
(ended May 31) on June 28 with adjusted earnings of 77 cents per
share, crushing the Zacks Consensus Estimate of 54 cents. Revenues
shot up 12% year over year to $755.4 million on the heels of a
higher average selling price, increased volume and synergies of
acquisitions.
The company's Pressure Cylinders division had a solid quarter with
revenues jumping 29% year over year to $236.8 million thanks to
acquisitions and a better sale mix. Volumes spiked 45.8% to 24,011
units. However, sales in the core Steel Processing unit were
clipped marginally to $429.6 million on lower pricing.
Worthington hopes to continue its earnings momentum moving ahead.
The company expects the economy to improve slowly and its core
businesses to benefit from its growth strategies, which include
acquisitions and expansion in product lines and markets.
Estimates Climbing
For fiscal 2013, five out of seven estimates have been revised
higher in the last 30 days, pushing the Zacks Consensus Estimate
upward by 8.6% to $2.14. This suggests an annualized growth of
roughly 25.9%. Two estimates out of five have moved higher for
fiscal 2014 over the same period. The Zacks Consensus Estimate is
up 5.2% to $2.43 per share, representing an estimated
year-over-year growth of roughly 13.6%.
A Value Play
The price chart below shows that Worthington's shares took a sharp
tumble back in September 2011 when concerns of slowing global
economic growth and fears of a European debt crisis led to a
selloff in stocks. Following a series of peaks and troughs, the
stock has recently begun to gather momentum, thanks in part to the
upbeat fourth quarter results.
Worthington has plenty of reasons to be labeled as a value stock.
In addition to having a low P/S, the stock has a forward P/E ratio
of just 10.2. It also has a price-to-book (P/B) ratio of 2.0. (A
P/S ratio lower than 1.0, a P/E below 15.0 and a P/B ratio under
3.0 generally indicate value.) Moreover, the company offers a
commendable dividend yield of 2.4% and has a 1-year ROE of 17.2%,
which is higher than its peer group average of 10%.
Founded in 1955, Worthington Industries is engaged in processing
steel for application in the automotive, construction, hardware,
agricultural, aerospace and other industries. The company, which
has a market cap of roughly $1.47 billion, makes a range of
processed steel items, pressure cylinders (including oxygen and
helium tanks and hand torches), metal framing products, racks,
shipping pallets, airbrake tanks and consumer products. The company
operates 80 facilities throughout 12 nations and has annual
revenues of roughly $2.5 billion.
WORTHINGTON IND (WOR): Free Stock Analysis
Report
WORTHINGTON IND (WOR): Free Stock Analysis
Report
WORTHINGTON IND (WOR): Free Stock Analysis
Report
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