HI: 2 Industrial Stocks to Check out Before 2022 Ends
The sustained demand for industrial goods and services and favorable federal policies and funding should accelerate the industrial sector's expansion. Given the industry's promising growth prospects,…
The industrial sector is expected to maintain momentum in the foreseeable future, owing to rising demand for industrial goods and services in various sectors. Moreover, approximately 742.3 million square feet of industrial space was under construction as of the end of November.
Despite workforce shortages, supply chain issues, and skyrocketing inflation, industrial production grew 2.5% year-over-year in November. Furthermore, increasing government spending is accelerating the industry's expansion. The Bipartisan Infrastructure Law has already provided over $185 billion for more than 6,900 projects.
The law also allocates $8 billion over the next five years to the Infrastructure for Rebuilding America (INFRA) initiative. The global industrial services market is expected to reach $65 billion by 2030, growing at a CAGR of 7%. Rising globalization, foreign direct investment, and urbanization are expected to drive the global industrial services market's growth.
Given the industry's promising outlook, it could be wise to add fundamentally strong industrial stocks Hillenbrand, Inc. (HI) and Myers Industries, Inc. (MYE) to your portfolio before the end of the year.
Hillenbrand, Inc. (HI)
HI is a multinational, diversified industrial corporation. The company operates through segments, including Advanced Process Solutions; Molding Technology Solutions; and Batesville.
On December 1, HI announced the successful acquisition of Illinois Tool Works Inc.'s (ITW) Peerless Food Equipment subsidiary for approximately $59 million. By merging Peerless with its current Coperion, LINXIS, and Gabler technologies, the company will gain a sizable market share in the food industry and offer its clients more comprehensive solutions.
For the fiscal 2022 fourth quarter ended September 30, 2022, HI's income before taxes increased 18.7 % year-over-year to $82.50 million while its EBITDA grew 8.1% year-over-year to $124.8 million. The company's consolidated net income increased 3.9% year-over-year to $59.2 million, and its EPS stood at $0.81, a 9.5% increase from the year-ago value.
On December 7, HI's board of directors declared a regular quarterly cash dividend of $0.22 per share on the company's common stock, payable December 30, 2022, to shareholders of record on December 16, 2022. The company has raised its dividends for 14 consecutive years. It pays a $0.88 per share dividend annually, which translates to a 2.14% yield on the current price. Its four-year average dividend yield is 2.35%.
Analysts expect the company's EPS and revenue for the current fiscal year (ending September 2023) to increase by 2.3% and 5.5% from the previous year to $4.02 and $3.10 billion, respectively.
In addition, the company's EPS and revenue for the next fiscal year are expected to grow 10.8% and 0.1% from the year-over-year to $4.46 and $3.11 billion, respectively. Furthermore, HI has surpassed its consensus EPS in all four trailing quarters, which is impressive.
Shares of HI have gained 2.5% over the past six months to close the last trading session at $41.18.
HI's POWR Ratings reflect its strong outlook. The stock has an overall rating of B, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Quality and Value. Within the Industrial – Manufacturing industry, it is ranked #4 of 35 stocks.
To see additional POWR ratings for Growth, Sentiment, Stability, and Momentum for HI, click here.
Myers Industries, Inc. (MYE)
MYE distributes tire servicing equipment in Ohio. It operates through The Material Handling; and Distribution segments. The company facilitates the distribution of retail and wholesale goods, food processing, and industrial manufacturing. It also supplies tools and equipment for servicing tires, wheels, and undercarriages.
On October 17, MYE showcased products from its complete materials handling segment portfolio at Pack Expo. By allowing visitors to validate the performance of in-demand Intermediate Bulk Containers (IBC) and fully understand their superior features and proven performance for their applications, the company hopes to win the faith of its customers by showcasing the advanced features of its products.
For the fiscal 2022 third quarter ended September 30, 2022, MYE's net sales grew 14% from the previous year's quarter to $228.07 million, while its gross profit increased 32.2% year-over-year to $71.65 million. Its operating income rose 68.4% from the year-ago value to $19.90 million.
In addition, the company's net income came in at $13.67 million, a 73% increase year-over-year, and its EPS stood at $0.37, up 68.2% year-over-year.
On October 20, MYE's Board of Directors approved a quarterly cash dividend of $0.135 per share, payable on January 4, 2023, to shareholders of record on December 5, 2022. The company pays a $0.54 per share dividend annually, which translates to a 2.34% yield on the current price. Its four-year average dividend yield is 3.07%.
The consensus EPS estimate of $1.65 for the current fiscal year (ending December 2022) indicates a 70.1% year-over-year improvement. Likewise, the consensus revenue estimate of $907.33 million for the same year indicates a rise of 19.2% from the previous year.
In addition, analysts expect the company's EPS and revenue for the next fiscal year to grow 15.5% and 7.7% year-over-year to $1.91 and $977.09 million, respectively. Shares of MYE have gained 3.1% over the past month and 17.4% over the past year to close the last trading session at $23.12.
MYE's POWR Ratings reflect its promising outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
The stock has a B grade for Sentiment, Growth, Stability, and Quality. Within the same industry, MYE is ranked #2 of 35 stocks.
Click here to see additional ratings of MYE for Value and Momentum. HI shares were trading at $41.00 per share on Tuesday morning, down $0.18 (-0.44%). Year-to-date, HI has declined -19.52%, versus a -18.23% rise in the benchmark S&P 500 index during the same period.