Here's Why You Should Consider Investing in Ingersoll Rand Stock
Ingersoll Rand Inc. IR is poised to gain from strength across its businesses, strong product portfolio, strategic acquisitions and a sound capital-deployment strategy. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
IR, which has a market capitalization of $39.9 billion, currently carries a Zacks Rank #2 (Buy). Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Ingersoll Rand continues to see higher orders across its product portfolio of industrial vacuums and blowers along with stable orders for compressors, which will drive the Industrial Technologies & Services segment. Growth in short-cycle orders, along with strong book-and-ship orders, is likely to be a tailwind for the Precision and Science Technologies segment. Driven by strength across its businesses, management expects total revenues to increase in the band of 6-8% in 2024 year over year.
Benefits From Acquisitions: Ingersoll Rand completed the acquisition of Air Power Systems Co., LLC (“APSCO”), Blutek s.r.l. and UT Pumps & Systems Private Limited in October 2024. The buyout of APSCO will enable the company to boost its position in the dry and liquid bulk markets with energy-efficient solutions. With the Blutek buyout, IR will be able to enhance its competitiveness in high-specification projects by adding technology capabilities, expertise and aftermarket opportunities in fast-growing markets like biogas and carbon capture. The acquisition of UT Pumps will enhance its product portfolio with new pump technology.
In June 2024, the company acquired ILC Dover. The inclusion of ILC Dover’s single-use solutions in biopharma and pharma production processes will complement IR’s expertise in liquid handling technologies and positive displacement pumps. Also, its Friulair buyout in February 2024 strengthened its air dryer business and added new chiller production capabilities, thereby boosting its Industrial Technologies and Services segment. In second-quarter 2024, acquisitions contributed 5.7% to total revenues.
IR Stock’s Price Performance
Image Source: Zacks Investment Research
In the past year, the stock has risen 56.4% compared with the industry’s 33.4% growth.
Healthy Liquidity Position: IR’s strong liquidity position adds to its strength. For instance, exiting the second quarter, its cash and cash equivalents totaled $1.1 billion, significantly higher than its short-term borrowings and current maturities of $4.5 million. This implies that the company has adequate cash to meet its short-term debt obligations.
Also, strong free cash flow generation supports the company’s capital deployment policies. In the first six months of 2024, it generated a free cash flow of $382.4 million, representing growth of 8.7% year over year.
Shareholder-Friendly Policies: Ingersoll Rand is committed to rewarding shareholders through dividend payouts and share repurchases. In 2023, the company paid dividends of $32.4 million and repurchased shares worth $263 million. In the first six months of 2024, dividend payouts totaled $16.1 million and $135.5 million worth of shares were repurchased.
Other Stocks to Consider
Other top-ranked companies from the same space are discussed below.
Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GHM delivered a trailing four-quarter average earnings surprise of 133.3%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 (ending March 2025) earnings has increased 17.3%.
Crane Company CR presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 0.4%.
Parker-Hannifin Corporation PH currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 1.4%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Parker-Hannifin Corporation (PH) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
Graham Corporation (GHM) : Free Stock Analysis Report
Crane Company (CR) : Free Stock Analysis Report