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Here's Why You Should Add Greif (GEF) Stock to Your Portfolio
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Greif, Inc. (GEF - Free Report) is gaining from the solid demand in the key end markets, focus on operational execution and pricing actions. The company continues to invest in the business, return excess cash to shareholders via an attractive and growing dividend, and lower its debt levels. These factors make Greif a compelling investment option.
The company currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance: The stock has gained 1.1% over the past six months, outperforming the industry’s growth of 0.2%.
Image Source: Zacks Investment Research
Earnings & Sales Top Estimates in Q2: Greif’s second-quarter fiscal 2022 adjusted earnings per share of $2.41 beat the Zacks Consensus Estimate of $1.79 and improved a whopping 113% year over year. Revenues of $1,667 million surpassed the Zacks Consensus Estimate of $1,591 million and increased 24% year on year.
Positive Outlook: Greif expects adjusted earnings per share for fiscal 2022 between $7.45 and $7.75. The mid-point of the guidance indicates a year-over-year improvement of 36%.
Earnings Surprise History: The company has a trailing four-quarter earnings surprise of 22.9%, on average.
Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for the company’s fiscal 2022 earnings has moved north by 17% over the past 30 days.
Positive Growth Projections: The Zacks Consensus Estimate for the fiscal 2022 earnings per share is currently pegged at $7.63, indicating year-over-year growth of 364%. The stock has an estimated long-term earnings growth rate of 10%.
Valuation is Inexpensive: The trailing 12-month EV/EBITDA ratio is 5.39 for the company, while the industry's average trailing 12-month EV/EBITDA ratio is 18.44.
Growth Drivers
Greif is witnessing broad-based improvement in several of its key end markets. The Global Industrial Packaging segment has been seeing solid demand in its global resin-based portfolio with higher volumes witnessed in plastic drums and Intermediate Bulk Container (IBC), backed by the strategic growth investments in the United States and EMEA and ongoing recovery in the industrial end markets. The Paper Packaging segment has been gaining from strong volumes in converting operations and higher selling prices due to increases in published containerboard and boxboard prices. Robust demand and pricing increases are likely to negate the impact of cost inflation and contribute to the company’s earnings.
In February 2019, the company acquired Caraustar Industries, Inc. and is currently integrating its operations. The buyout has strengthened Greif’s leadership in industrial packaging and significantly bolstered its margins, free cash flow and profitability. It continues to anticipate run-rate synergies of at least $70 million by 2022.
Greif will benefit from its focus on operational execution, capital discipline, and a solid and diverse product portfolio. The company will continue to focus on its restructuring activities. GEF continues to invest in the business while lowering its debt levels. Given the improving leverage profile and strong prospects for future cash generation, the company’s board hiked the quarterly dividend by 4.5%.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are Titan International , Myers Industries (MYE - Free Report) and Packaging Corporation of America (PKG - Free Report) . All of these stocks sport a Zacks Rank #1 at present.
Titan International has an estimated earnings growth rate of 112% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 55%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. The company’s shares have soared 132% in the past six months.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have risen 17% over the last six months.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have risen 9% in the past six months.
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Here's Why You Should Add Greif (GEF) Stock to Your Portfolio
Greif, Inc. (GEF - Free Report) is gaining from the solid demand in the key end markets, focus on operational execution and pricing actions. The company continues to invest in the business, return excess cash to shareholders via an attractive and growing dividend, and lower its debt levels. These factors make Greif a compelling investment option.
The company currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance: The stock has gained 1.1% over the past six months, outperforming the industry’s growth of 0.2%.
Image Source: Zacks Investment Research
Earnings & Sales Top Estimates in Q2: Greif’s second-quarter fiscal 2022 adjusted earnings per share of $2.41 beat the Zacks Consensus Estimate of $1.79 and improved a whopping 113% year over year. Revenues of $1,667 million surpassed the Zacks Consensus Estimate of $1,591 million and increased 24% year on year.
Positive Outlook: Greif expects adjusted earnings per share for fiscal 2022 between $7.45 and $7.75. The mid-point of the guidance indicates a year-over-year improvement of 36%.
Earnings Surprise History: The company has a trailing four-quarter earnings surprise of 22.9%, on average.
Upbeat Estimate Revision Activity: The Zacks Consensus Estimate for the company’s fiscal 2022 earnings has moved north by 17% over the past 30 days.
Positive Growth Projections: The Zacks Consensus Estimate for the fiscal 2022 earnings per share is currently pegged at $7.63, indicating year-over-year growth of 364%. The stock has an estimated long-term earnings growth rate of 10%.
Valuation is Inexpensive: The trailing 12-month EV/EBITDA ratio is 5.39 for the company, while the industry's average trailing 12-month EV/EBITDA ratio is 18.44.
Growth Drivers
Greif is witnessing broad-based improvement in several of its key end markets. The Global Industrial Packaging segment has been seeing solid demand in its global resin-based portfolio with higher volumes witnessed in plastic drums and Intermediate Bulk Container (IBC), backed by the strategic growth investments in the United States and EMEA and ongoing recovery in the industrial end markets. The Paper Packaging segment has been gaining from strong volumes in converting operations and higher selling prices due to increases in published containerboard and boxboard prices. Robust demand and pricing increases are likely to negate the impact of cost inflation and contribute to the company’s earnings.
In February 2019, the company acquired Caraustar Industries, Inc. and is currently integrating its operations. The buyout has strengthened Greif’s leadership in industrial packaging and significantly bolstered its margins, free cash flow and profitability. It continues to anticipate run-rate synergies of at least $70 million by 2022.
Greif will benefit from its focus on operational execution, capital discipline, and a solid and diverse product portfolio. The company will continue to focus on its restructuring activities. GEF continues to invest in the business while lowering its debt levels. Given the improving leverage profile and strong prospects for future cash generation, the company’s board hiked the quarterly dividend by 4.5%.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are Titan International , Myers Industries (MYE - Free Report) and Packaging Corporation of America (PKG - Free Report) . All of these stocks sport a Zacks Rank #1 at present.
Titan International has an estimated earnings growth rate of 112% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 55%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. The company’s shares have soared 132% in the past six months.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have risen 17% over the last six months.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have risen 9% in the past six months.