We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reasons Why Howmet (HWM) Deserves to be in Your Portfolio
Read MoreHide Full Article
Howmet Aerospace Inc. (HWM - Free Report) stands to benefit from strength across its businesses and focus on operational excellence. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
The company has a market capitalization of $34 billion. Over the past six months, it has gained 53.4% compared with the industry’s growth of 25.8%. HWM currently sports a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Howmet is benefiting from solid momentum in its Engine Products segment, driven by strength across commercial aerospace, defense aerospace and oil & gas markets. Solid demand for engine products, supported by higher build rates, spares growth and robust aircraft OEM backlogs are driving the segment’s performance. Engine Products’ revenues jumped 11% on a year-over-year basis in the first quarter of 2024.
Also, strong momentum in the commercial aerospace market, driven by strong build rates, is driving the Fastening Systems segment. The segment’s revenues increased 25% year over year in the first quarter. Driven by strength across its businesses, Howmet expects 2024 revenues in the range of $7.225-$7.375 billion, indicating growth of 9.9% at the mid-point from the year-ago levels.
Shareholder-Friendly Policies: Howmet remains committed to increasing shareholders’ value through dividend payments and share repurchases. For instance, in the first three months of 2024, it paid dividends worth $21 million and repurchased shares for $150 million. Also, in 2023, the company paid dividends of $73 million and repurchased shares worth $250 million. Subject to board approval, management expects to hike the dividend rate by 40% to 7 cents in the third quarter of 2024.
Solid Liquidity Position: The company’s sound liquidity position is an added positive. Exiting the first quarter, HWM’s cash and cash equivalents totaled $533 million, higher than its short-term debt and current maturities of $404 million. This implies that the company has sufficient cash to meet its current debt obligations.
Estimate Revisions: The Zacks Consensus Estimate for HWM’s 2024 earnings is pegged at $2.39 per share, indicating an increase of 9.6% from the 60-day-ago figure. The consensus estimate for 2025 earnings is pegged at $2.92, indicating an increase of 9.8% in the same period.
Other Key Picks
Some other top-ranked stocks from the same space are presented below.
GTES delivered a trailing four-quarter average earnings surprise of 14.9%. In the past 60 days, the Zacks Consensus Estimate for Gates Industrial’s 2024 earnings has remained stable.
Mayville Engineering Company, Inc. (MEC - Free Report) presently carries a Zacks Rank #2. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has risen 3%.
Sterling Infrastructure, Inc. (STRL - Free Report) presently has a Zacks Rank of 2. STRL delivered a trailing four-quarter average earnings surprise of 22.3%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 3%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Reasons Why Howmet (HWM) Deserves to be in Your Portfolio
Howmet Aerospace Inc. (HWM - Free Report) stands to benefit from strength across its businesses and focus on operational excellence. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
The company has a market capitalization of $34 billion. Over the past six months, it has gained 53.4% compared with the industry’s growth of 25.8%. HWM currently sports a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Howmet is benefiting from solid momentum in its Engine Products segment, driven by strength across commercial aerospace, defense aerospace and oil & gas markets. Solid demand for engine products, supported by higher build rates, spares growth and robust aircraft OEM backlogs are driving the segment’s performance. Engine Products’ revenues jumped 11% on a year-over-year basis in the first quarter of 2024.
Also, strong momentum in the commercial aerospace market, driven by strong build rates, is driving the Fastening Systems segment. The segment’s revenues increased 25% year over year in the first quarter. Driven by strength across its businesses, Howmet expects 2024 revenues in the range of $7.225-$7.375 billion, indicating growth of 9.9% at the mid-point from the year-ago levels.
Shareholder-Friendly Policies: Howmet remains committed to increasing shareholders’ value through dividend payments and share repurchases. For instance, in the first three months of 2024, it paid dividends worth $21 million and repurchased shares for $150 million. Also, in 2023, the company paid dividends of $73 million and repurchased shares worth $250 million. Subject to board approval, management expects to hike the dividend rate by 40% to 7 cents in the third quarter of 2024.
Solid Liquidity Position: The company’s sound liquidity position is an added positive. Exiting the first quarter, HWM’s cash and cash equivalents totaled $533 million, higher than its short-term debt and current maturities of $404 million. This implies that the company has sufficient cash to meet its current debt obligations.
Estimate Revisions: The Zacks Consensus Estimate for HWM’s 2024 earnings is pegged at $2.39 per share, indicating an increase of 9.6% from the 60-day-ago figure. The consensus estimate for 2025 earnings is pegged at $2.92, indicating an increase of 9.8% in the same period.
Other Key Picks
Some other top-ranked stocks from the same space are presented below.
Gates Industrial Corporation plc (GTES - Free Report) currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GTES delivered a trailing four-quarter average earnings surprise of 14.9%. In the past 60 days, the Zacks Consensus Estimate for Gates Industrial’s 2024 earnings has remained stable.
Mayville Engineering Company, Inc. (MEC - Free Report) presently carries a Zacks Rank #2. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has risen 3%.
Sterling Infrastructure, Inc. (STRL - Free Report) presently has a Zacks Rank of 2. STRL delivered a trailing four-quarter average earnings surprise of 22.3%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 3%.