Here's Why Hold Strategy is Apt for RBC Bearings (RBC) Stock
RBC Bearings Incorporated RBC has been benefiting from strength in the Aerospace/Defense segment and accretive acquisitions, despite softness in the semiconductor market within the Industrial Segment and the rising cost of sales.
What’s Aiding RBC?
Business Strength: Strength in commercial aerospace, driven by the recovery in build rates from large OEMs (original equipment manufacturer), and stability in the aftermarket are aiding the Aerospace/Defense segment. The company is also poised to benefit from its product development initiatives and robust demand for large planes like the Airbus 737, 787, A320 and A330 principally, in the quarters ahead. Additional volume increases, driven by RBC Bearings’ space initiatives, are also likely to be beneficial.
Expansion Efforts: RBC has expanded its reach with the acquisition of Carson City, NV-based precision bearings manufacturer Specline, Inc. in August 2023. Specline’s unique bearing and manufacturing processes expanded RBC Bearings’ aerospace product offerings and boosted the company’s production capacity.
Rewards to Shareholders: RBC’s measures to reward its shareholders through dividend payments are noteworthy. In the first nine months of fiscal 2024 (ended December 2023), the company paid dividends of $17.3 million, almost flat year over year, and repurchased shares for $7.6 million, increasing 15.4% year over year.
In light of the above-mentioned positives, we believe, investors should retain RBC stock for now, as suggested by its current Zacks Rank #3 (Hold). In the past year, shares of the company have gained 19%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Atmus Filtration Technologies Inc. ATMU presently sports a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 20.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
ATMU’s earnings estimates have increased 2.9% for 2024 in the past 60 days. Shares of Atmus Filtration have risen 17.2% in the past year.
Tetra Tech, Inc. TTEK currently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter average earnings surprise of 14.4%.
In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%. The stock has soared 31.2% in the past year.
Applied Industrial Technologies, Inc. AIT presently has a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 34.8% in the past year.
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Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report
RBC Bearings Incorporated (RBC) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Atmus Filtration Technologies Inc. (ATMU) : Free Stock Analysis Report
