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Here's Why You Should Add ITT Stock to Your Portfolio Now

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ITT Inc. (ITT - Free Report) is well-poised for growth, courtesy of strength across its businesses and accretive acquisitions. The company remains focused on investing in growth opportunities and strengthening its long-term market position.

Headquartered in New York City, ITT is a global multi-industry leader in high-technology engineering and manufacturing projects. It engages in the design, manufacture and sale of a wide range of engineered products and services. In the past year, the company has gained 32.8% compared with the industry’s 8.4% growth. ITT currently carries a Zacks Rank #2 (Buy).

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Let’s delve into the factors that make this company a smart investment choice at the moment.

Business Strength: Growth in pump projects in the industrial market is aiding ITT’s Industrial Process (“IP”) segment. A strong pipeline of awards in energy, mining and decarbonization projects, including a new contract with ExxonMobil, also bodes well for the segment. Growth in component sales within the commercial aerospace and defense markets is supporting the Connect and Control Technologies (“CCT”) segment’s performance. Rising U.S. & international defense budgets and robust demand for commercial air travel will auger well for the segment in the quarters ahead.

Strength in the friction OE (original equipment), KONI and Axtone businesses is driving growth for the Motion Technologies segment. Strong demand for the company’s products and solutions in OEM, truck and trailer, and rail transportation markets is likely to drive the segment’s performance in the quarters ahead.

Expansion Efforts: Over time, ITT has steadily strengthened its business through acquisitions. In January 2024, it completed the acquisition of the privately held Svanehøj Group A/S (Svanehøj) for approximately $395 million. Svanehøj has become part of the company’s IP segment, focusing on highly engineered pumps, valves and aftermarket services. The inclusion of Svanehøj’s portfolio of highly engineered flow solutions should enable ITT to expand its customer offerings and boost its position in the marine pump industry. The acquisition of Micro-Mode Products, Inc., in May 2023, enhanced ITT's product portfolio and customer base, specifically for long-term defense programs.

The addition of Micro-Mode grew ITT's existing North America connectors platform, which is part of its CCT segment. The company acquired Clippard Instrument Laboratories’ product lines in August 2022. With product lines of stainless steel, brass and aluminum cylinders, and volume tanks, the acquisition expanded ITT’s Compact Automation product offering in the robotics, packaging and automation end markets. The acquisitions of Svanehøj and Micro-Mode had a contribution of 5% to the company’s sales growth in first-quarter 2024.

Rewards to Shareholders: ITT continues to increase shareholders’ value through dividend payments and share repurchases. During the first three months of 2024, ITT paid out dividends of $26.5 million, up 9.5% year over year. Also, in 2023, dividend payments totaled $95.8 million and share repurchases were $60 million. The quarterly dividend rate was hiked 10% in February 2024. Further, in October 2023, ITT’s board approved a $1 billion share repurchase program for an indefinite time.

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Other top-ranked companies from the Conglomerates sector are discussed below:

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Carlisle Companies Incorporated (CSL - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 17%.

The consensus estimate for CSL’s 2024 earnings has increased 2.2% in the past 60 days. Shares of Carlisle have risen 57.9% in the past year.

Griffon Corporation (GFF - Free Report) presently carries a Zacks Rank of 2. It delivered a trailing four-quarter average earnings surprise of 33.5%.

In the past 60 days, the Zacks Consensus Estimate for GFF’s 2024 earnings has increased 4.2%. The stock has risen 52.6% in the past year.

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