Woodward (WWD) Hits 52-Week High On Solid Performance

Woodward Inc. (NASDAQ:WWD) hit a new 52-week high of $62.59 on Aug 23, before closing the trading session a tad lower at $62.10. The stock has delivered an impressive one-year return of about 43.1%, while the S&P 500 returned 17.1% over the same timeframe.

Over the past 52 weeks, Woodward Inc.’s share price has ranged from a low of $39.68 to a high of $62.59. Average volume of shares traded over the last three months is approximately 275,466.

What’s Driving Woodward?

Woodward reported third-quarter fiscal 2016 earnings of 81 cents per share, beating the Zacks Consensus Estimate by 6.6% and up 22.7% from the prior-year figure. Continued weakness in the Industrial segment was offset by a strong performance at Aerospace and a lower tax rate.

The company has reported a positive earnings surprise in three out of the last four quarters, resulting in a positive average surprise of 2.14%.

Woodward has been investing in technologies in order to secure fresh businesses. It is also spending on new manufacturing units and automation equipment to boost efficiency, as the company intends to accelerate production in the latter half of the decade. In the first nine months of fiscal 2016, the company has spent $129 million as capital expenditure.

Woodward is witnessing strong backlog in the commercial aerospace space due to rising demand for fuel-efficient aircraft and increasing passenger miles. The next-generation narrow-body jets are expected to be launched soon and the company has significant content gains on these aircraft compared to the current generation.

Further, Woodward continues to focus on diversifying its revenue stream. Its strategic plan to become a systems integrator has bolstered its contract flow substantially, enabling the company to capture a larger share of the wide-body commercial aircraft market. The company continues to enjoy strong demand with the launch of Boeing’s 737 Max and Airbus’ A320neo.

Moreover, Woodward has entered into a joint venture with GE Aviation for designing and developing fuel systems for the latter’s large commercial aircraft engine lines. As a preferred supplier, Woodward will provide the majority of components for the GE9X fuel system.

Woodward currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the Industrial Equipment & competent space is Watts Water Technologies, Inc. (NYSE:WTS) , with a Zacks Rank #2 (Buy). Investors interested in the broader defense space may also consider General Dynamics (NYSE:GD) and Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) , both carrying a Zacks Rank #2.

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