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MRC Global (MRC) Exhibits Solid Prospects, Risks Persist

By Zacks Investment ResearchStock MarketsJun 01, 2021 09:17PM ET
MRC Global (MRC) Exhibits Solid Prospects, Risks Persist
By Zacks Investment Research   |  Jun 01, 2021 09:17PM ET
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MRC Global (NYSE:MRC) Inc. MRC has been gaining from its extensive presence across several end markets, including upstream production, midstream pipelines, chemicals & refining, and gas utilities. This has been enabling it to tap into opportunities and neutralize operating risks associated with a single market. Of late, its business in the gas utility sector has been witnessing strength, driven by increasing customer activity. Notably, its businesses in the gas utility sector experienced year-over-year growth of 4% in first-quarter 2021.

Also, the company has been benefiting from lucrative contract wins and projects over time. During 2020, the company secured new contracts from CenterPoint, Noble Midstream and Ameren (NYSE:AEE). Also, it renewed a number of five-year contracts with its gas utility customers, including the three largest — Dominion, PG&E and TECO Energy (NYSE:TE). Further, some multi-year contracts signed previously have been proving beneficial for the company.

Moreover, it remains focused on rewarding shareholders handsomely through dividend payments. In full-year 2020 and first-quarter 2021, the company used $24 million and $6 million, respectively, for paying dividends.

However, weakness across all sectors (with the exception of the gas utilities sector) amid the coronavirus outbreak has been weighing on its top-line performance. In the quarters ahead, low customer spending might continue affecting the company’s performance. With operations spread globally, the company’s performance is also exposed to risks arising from geopolitical issues, trade relations, adverse movements in foreign currencies and governmental policies.

In the past three months, this Zacks Rank #3 (Hold) stock has returned 24.4% compared with the industry’s growth of 5.7%.

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Stocks to Consider

Some better-ranked stocks from the Zacks Industrial Products sector are Barnes Group (NYSE:B), Inc. B, Dover Corporation (NYSE:DOV) DOV and Graco (NYSE:GGG) Inc. GGG, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Barnes pulled off a trailing four-quarter earnings surprise of 19.45%, on average.

Dover pulled off a trailing four-quarter earnings surprise of 21.35%, on average.

Graco delivered a trailing four-quarter earnings surprise of 28.28%, on average.

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Graco Inc. (GGG): Free Stock Analysis Report

Dover Corporation (DOV): Free Stock Analysis Report

MRC Global Inc. (MRC): Free Stock Analysis Report

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MRC Global (MRC) Exhibits Solid Prospects, Risks Persist

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MRC Global (MRC) Exhibits Solid Prospects, Risks Persist

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