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Tetra Tech, Inc. TTEK currently boasts robust prospects on strength in its businesses, solid product portfolio, acquired assets and a sound capital-deployment strategy.
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The Zacks Rank #2 (Buy) company has a market capitalization of $6.7 billion. In the past year, it has gained 4.7% against the industry’s decline of 9.2%.
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Business Strength: Tetra Tech has been gaining from projects related to climate change, renewable energy and environmental programs. Digital water transformation, infrastructure stimulus, and commercial and government projects are likely to drive its performance in the quarters ahead. For fiscal 2022 (ending September 2022), the company anticipates generating net revenues of $2.72-$2.82 billion, higher than $2.65-$2.80 billion estimated previously. Exiting second-quarter fiscal 2022 (ended March 2022), its backlog remained strong at $3.61 billion, reflecting an increase of 4.6% sequentially.
Acquisition Benefits: The company’s acquisition of Piteau Associates (March 2022) is expected to boost its capabilities in advanced analytics for providing water management and geotechnical solutions to its customers. Also, its buyout of Axiom Data Science (March 2022) is likely to strengthen its advanced climate data analytics solutions offerings. It acquired Enterprise Automation (October 2021), which has been strengthening its digital technology solutions for water sector clients. In the first six months of fiscal 2022, TTEK spent $33.6 million on acquisitions.
Shareholder-Friendly Policies: Tetra Tech remains focused on rewarding its shareholders through dividend payouts and share buybacks. In the first six months of fiscal 2022, the company paid out dividends worth $21.6 million and bought back shares worth $100 million. Its quarterly dividend rate was hiked by 15% in May 2022. Also, the company announced an additional share buyback program worth $400 million in October 2021.
Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for the company’s fiscal 2022 earnings has trended up from $4.28 to $4.41 per share on two upward estimate revisions against none downward. Also, the estimates for fiscal 2023 (ending September 2023) earnings have increased from $4.63 to $4.81 on two upward estimate revisions versus none downward.
Other Stocks to Consider
Some other top-ranked companies from the Zacks Industrial Products sector are discussed below.
AZZ Inc. AZZ presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Its earnings surprise in the last four quarters was 22.3%, on average.
In the past 60 days, AZZ’s earnings estimates have increased 12.6% for fiscal 2023 (ending February 2023). Its shares have lost 16.8% in the past year.
Regal Rexnord Corporation RRX presently has a Zacks Rank #2. Its earnings surprise in the last four quarters was 5.4%.
In the past 60 days, Regal Rexnord’s earnings estimates have increased 1.5% for 2022. Its shares have lost 11.1% in the past year.
Ferguson plc FERG presently carries a Zacks Rank #2. Its earnings surprise in the last reported quarter was 14.2%.
In the past 60 days, Ferguson’s earnings estimates have increased 2.8% for fiscal 2022 (ending July 2022). FERG’s shares have lost 5.6% in the past year.
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Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report
AZZ Inc. (AZZ) : Free Stock Analysis Report
Wolseley PLC (FERG) : Free Stock Analysis Report
Regal Rexnord Corporation (RRX) : Free Stock Analysis Report
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