Stocks have delivered a strong performance in 2023 so far, with many residing well in the green year-to-date thanks to better-than-expected inflationary data and an earnings “apocalypse” that has failed to materialize.
And with such a strong performance out of the gate, many are now heading toward and breaking 52-week highs, reflecting favorable positive momentum.
Further, by selecting stocks near or breaking out to new highs, investors find themselves in favorable trends where buyers have been in control.
Three stocks – Nucor NUE, Applied Industrial Technologies AIT, and United Rentals URI – are all heading toward or breaking 52-week highs. Below is a chart illustrating the performance of all three year-to-date, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three have found plenty of buyers.
In addition, all have witnessed favorable earnings estimate revisions as of late, providing shares the fuel they need. Let’s take a closer look at each one.
United Rentals Inc.
United Rentals is the largest equipment rental company in the world, with an integrated network of rental locations in the United States, Canada, and Europe.
URI has seen its earnings outlook improve across all timeframes as of late, pushing the stock into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
URI sports a stellar growth profile, with earnings forecasted to soar 27% in its current fiscal year (FY23) and a further 10% in FY24.
The projected earnings growth comes on the back of forecasted Y/Y revenue increases of 21% in FY23 and 2% in FY24.
And for the cherry on top, URI’s trailing twelve-month return on equity (ROE) of 36% is well above its Zacks Industry average, indicating a higher level of efficiency in generating profit from existing assets.
Image Source: Zacks Investment Research
Applied Industrial Technologies
Applied Industrial Technologies distributes value-added industrial products, including engineered fluid power components, bearings, specialty flow control solutions, power transmission products, and miscellaneous industrial supplies.
AIT’s earnings outlook has drifted higher across the board, helping to fuel shares on their run.
Image Source: Zacks Investment Research
In addition, the stock does pay a dividend, currently yielding a modest 0.9%. While the yield is below its Zacks sector average, AIT’s 3% five-year annualized dividend growth rate helps to even the playing field.
Image Source: Zacks Investment Research
Nucor
Nucor is a leading producer of structural steel, steel bars, steel joists, steel deck, and cold-finished bars in the United States. Like the stocks above, NUE boasts a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Nucor has delivered strong quarterly results as of late, exceeding both earnings and revenue expectations in four consecutive quarters. Just in its latest release, NUE penciled in a 17% EPS beat and reported revenue more than 10% above expectations.
Image Source: Zacks Investment Research
Many stocks in the Zacks Basic Materials sector pay dividends, and Nucor is no different; NUE’s annual dividend yield currently sits at 1.2%, with its payout growing more than 6% over the last five years.
Further, the company’s 7% payout ratio is sustainable.
Image Source: Zacks Investment Research
Bottom Line
2023 has certainly gotten off to a much better start than 2022, with favorable inflationary data and earnings season helping keep the market afloat.
All three stocks above – Nucor NUE, Applied Industrial Technologies AIT, and United Rentals URI – have had little issues finding buyers, all breaking through or near 52-week highs.
And all three sport a favorable Zacks Rank, indicating that their business outlooks have recently shifted positively.
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Free: See Our Top Stock and 4 Runners Up >>Nucor Corporation (NUE) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
United Rentals, Inc. (URI) : Free Stock Analysis Report
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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.
