Here's Why It's Worth Investing in Crane (CR) Stock Now

Crane Co. CR currently boasts robust prospects on strength in its businesses, strong cash flows, acquired assets and a sound capital-deployment strategy.

Image Source: Zacks Investment Research

The Zacks Rank #2 (Buy) company has a market capitalization of $5.9 billion. In the past six months, the stock has gained 4.6% against the industry’s decline of 5.4%.

Let’s discuss the factors that make the company a smart investment option at the moment.

Business Strength: Crane has been benefiting from improving order trends across its businesses, including short-cycle commercial and core process. Strength in the chemical and general industrial end markets along with recovery in the commercial aerospace end market is likely to drive performance in the quarters ahead.

For 2021, the company predicts overall sales of $3,150 million, higher than $3,100 million predicted earlier. For the long run, Crane remains optimistic about growth opportunities in the Aerospace & Electronics segment. It expects the segment to generate core sales growth of 7-9% (CAGR) from 2021 through 2030.

Acquisition Benefits: Crane intends to strengthen and expand its businesses through acquisitions. In January 2020, the company acquired CIRCOR International’s Instrumentation & Sampling business, which has been adding value to its process valve business. For 2021, the company expects acquisitions to boost sales by $5 million.

Strong Cash Flows & Shareholder Rewards: Strong cash flows enable the company to deploy capital for repurchasing shares and paying out dividends. In the first nine months of 2021, the company generated a strong free cash flow of $286.4 million. For 2021, it predicts free cash flow to be $340-$365 million.

In the first nine months of 2021, it paid out dividends worth $75.5 million. In January 2020, the company announced a 10% hike in its quarterly dividend rate. Also, it unveiled a share repurchase program worth $300 million in October 2021.

Estimate Revisions: In the past 30 days, analysts have increasingly become bullish on Crane, as evident from positive earnings estimate revisions. The Zacks Consensus Estimate for its 2021 earnings has trended up from $6.34 to $6.43 on one upward estimate revision against none downward. Over the same timeframe, the consensus estimate for 2022 earnings has jumped from $7.23 to $7.31 on one upward estimate revision against none downward.

Other Key Picks

Some other top-ranked companies are discussed below.

Helios Technologies (NYSE:HLIO), Inc. HLIO presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It has a trailing four-quarter earnings surprise of 37.54%, on average.

In the past 30 days, Helios’ earnings estimates have increased 7.9% for 2021 and 9.8% for 2022. Its shares have gained 44.8% in the past six months.

AZZ (NYSE:AZZ) Inc. AZZ presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 25.47%, on average.

In the past 30 days, AZZ’s earnings estimates have been stable for fiscal 2022 (ending February 2022) and fiscal 2023 (ending February 2023). AZZ has dropped 1.5% in the past six months.

Welbilt (NYSE:WBT), Inc. WBT presently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 172.50%, on average.

Welbilt’s earnings estimates have increased 3.2% for 2021 and 5.9% for 2022 in the past 30 days. Its shares have lost 4.4% in the past six months.

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