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Reasons Why Investing in RBC Bearings Stock Seems Prudent Now
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RBC Bearings Incorporated (RBC - Free Report) is benefiting from strength across its Aerospace/Defense segment. Handsome rewards to shareholders add to the stock’s appeal.
Headquartered in Oxford, CT, RBC Bearings manufactures and distributes engineered bearings and precision components. The company sells its products through sales experts and uses product managers, marketing managers, customer service representatives and product application engineers in its selling efforts. Its products are sold to a wide variety of original equipment manufacturers (OEM) and distributors who are widely dispersed geographically.
Shares of RBC have gained 29% in a year. The company currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that make this company a smart investment choice at the moment.
Business Strength: RBC Bearings is benefiting from the strong performance of the Aerospace/Defense segment. Strength in the commercial aerospace market, driven by strong growth in orders from the OEM and the aftermarket verticals, is driving the segment. The robust backlog level, along with RBC’s strong execution on incremental orders in the commercial aerospace market, is expected to be beneficial for the segment. An increase in demand for the company’s bearings and engineered component products in the defense market, supported by growth in marine, helicopter and missile applications orders, will likely augur well for the segment in the quarters ahead.
Well-Diversified Product Portfolio: RBC is poised to gain from its well-diversified product portfolio. Some of its notable products are spherical bearings (swaged, load slot, split race, split ball and Kaptor), sealed bearings, rod ends, clamping collars, keyless locking assemblies, precision dowel pins and rollers. Also, its investments in manufacturing processes are anticipated to be beneficial over the long term. It is worth noting that in early 2024, the company completed the construction of a 100,000-square-foot plant in Takata, Mexico, to increase its production capacity.
Expansion Efforts: RBC Bearings has been strengthening its business through acquisitions. The company acquired Carson City, NV-based precision bearings manufacturer Specline, Inc. in August 2023. The transaction was valued at $18.7 million. Specline’s unique bearing and manufacturing processes expanded RBC Bearings’ aerospace product offerings and boosted its production capacity.
Rewards to Shareholders: RBC Bearings remains committed to rewarding its shareholders handsomely through dividends and share buyback programs. In the first three months of fiscal 2025 (ended June 2024), the company paid dividends of $5.7 million, flat year over year and repurchased shares for $8 million, increasing 17.7% year over year. It repurchased shares worth $11 million and distributed preferred dividends of $22.9 million in fiscal 2024 (ended March 2024).
FLS delivered a trailing four-quarter average earnings surprise of 18.2%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2024 earnings has increased 3.8%.
Crane Company (CR - Free Report) 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 2%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.3%.
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Reasons Why Investing in RBC Bearings Stock Seems Prudent Now
RBC Bearings Incorporated (RBC - Free Report) is benefiting from strength across its Aerospace/Defense segment. Handsome rewards to shareholders add to the stock’s appeal.
Headquartered in Oxford, CT, RBC Bearings manufactures and distributes engineered bearings and precision components. The company sells its products through sales experts and uses product managers, marketing managers, customer service representatives and product application engineers in its selling efforts. Its products are sold to a wide variety of original equipment manufacturers (OEM) and distributors who are widely dispersed geographically.
Shares of RBC have gained 29% in a year. The company currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that make this company a smart investment choice at the moment.
Business Strength: RBC Bearings is benefiting from the strong performance of the Aerospace/Defense segment. Strength in the commercial aerospace market, driven by strong growth in orders from the OEM and the aftermarket verticals, is driving the segment. The robust backlog level, along with RBC’s strong execution on incremental orders in the commercial aerospace market, is expected to be beneficial for the segment. An increase in demand for the company’s bearings and engineered component products in the defense market, supported by growth in marine, helicopter and missile applications orders, will likely augur well for the segment in the quarters ahead.
Well-Diversified Product Portfolio: RBC is poised to gain from its well-diversified product portfolio. Some of its notable products are spherical bearings (swaged, load slot, split race, split ball and Kaptor), sealed bearings, rod ends, clamping collars, keyless locking assemblies, precision dowel pins and rollers. Also, its investments in manufacturing processes are anticipated to be beneficial over the long term. It is worth noting that in early 2024, the company completed the construction of a 100,000-square-foot plant in Takata, Mexico, to increase its production capacity.
Expansion Efforts: RBC Bearings has been strengthening its business through acquisitions. The company acquired Carson City, NV-based precision bearings manufacturer Specline, Inc. in August 2023. The transaction was valued at $18.7 million. Specline’s unique bearing and manufacturing processes expanded RBC Bearings’ aerospace product offerings and boosted its production capacity.
Rewards to Shareholders: RBC Bearings remains committed to rewarding its shareholders handsomely through dividends and share buyback programs. In the first three months of fiscal 2025 (ended June 2024), the company paid dividends of $5.7 million, flat year over year and repurchased shares for $8 million, increasing 17.7% year over year. It repurchased shares worth $11 million and distributed preferred dividends of $22.9 million in fiscal 2024 (ended March 2024).
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Other top-ranked companies from the Manufacturing - General Industrial industry are discussed below.
Flowserve Corporation (FLS - Free Report) currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 18.2%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2024 earnings has increased 3.8%.
Crane Company (CR - Free Report) 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 2%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.3%.