Credit: Shutterstock photoMachinery company Rexnord CorporationRXN recently announced the acquisition of Illinois-based World Dryer Corporation. Financial terms of the buyout have not been disclosed.
As revealed, World Dryer is a leading manufacturer of electric hand dryers and related products for the commercial end markets. The firm operates as a unit of Carrier Commercial Refrigeration, Inc., which is the business unit in United Technologies Coporation's UTX UTC Climate, Controls & Security business. World Dryer was founded in 1950 and currently has annual revenue generation capability of $20 million.
Post completion of the buyout, World Dryer will be integrated with Rexnord's Water Management business segment. World Dryer's hand dryers will strongly complement the segment's Zurn business, which provides water-efficient plumbing products. The combined businesses will offer superior products to commercial building owners.
Acquiring meaningful businesses or disposing non-core assets have helped Rexnord improve its business portfolio and work toward profitability enhancement. Notably, the company acquired Cambridge International Holdings Corporation while divested its non-strategic RHF product line for the best interests of its shareholders in fiscal 2017. In first-quarter fiscal 2018, the company's acquisitions and divestments had a combined positive impact of 1% on sales growth.
Year to date, Rexnord's shares have yielded 30.5% return, outperforming 14.8% gain of the industry .
Zacks Rank & Stocks to Consider
With a market capitalization of nearly $2.7 billion, Rexnord currently carries a Zacks Rank #4 (Sell). Despite expansionary efforts, we believe that the company's exposure to industry rivalry, forex woes and uncertain economic conditions can jeopardize its future prospects.
Rexnord Corporation Price and Consensus
Rexnord Corporation Price and Consensus | Rexnord Corporation Quote
A couple of better-ranked stocks in the machinery space are Kennametal Inc. KMT and A.O. Smith Corporation AOS . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Kennametal's earnings for 2017 are predicted to grow 44.6% year over year while the same for 2018 are likely to rise 20.7%. Also, the company delivered an average positive earnings surprise of 4.02% in the last four quarters.
A.O. Smith's earnings estimates for 2017 and 2018 represent year-over-year growth of 14.2% and 12.4%, respectively. Also, it pulled off an average positive earnings surprise of 3.25% for the last four quarters.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
