Yahoo Finance Reasons to Retain Kennametal (KMT) Stock in Your Portfolio
Kennametal Inc. KMT is benefiting from solid product offerings, commercial and operational excellence and a wide geographical presence despite weakness in the Infrastructure segment, cost inflation and forex woes.
Let us discuss the factors why investors should retain the stock for the time being.
Growth Catalysts
Business Strength: Strength in the aerospace & defense end markets within the Metal Cutting segment is supporting Kennametal’s growth. Also, strategic initiatives, innovation and operational excellence bode well for the segment. Within the segment, general engineering end-market revenues benefited from increased industrial activity in the Americas and EMEA regions. Its revenues increased 3% year over year in the first three months of fiscal 2024 (ended September 2023).
Innovation Capabilities: The company is poised to gain from its innovation capabilities. Also, mega-trends like hybrid and electric vehicles, digitalization and ESG align well with Kennametal’s technical expertise and market exposure. The company also aims to drive improved profitability through operational excellence by enhancing manufacturing and business process productivity and optimizing investments in commercial excellence and technology to target the highest return growth initiatives.
Rewards to Shareholders: KMT continues to increase shareholders’ value through dividend payments & share repurchases. In the first three months of fiscal 2024, Kennametal distributed dividends worth $16 million and repurchased shares worth $14 million. Also, in July 2021, the company’s board of directors approved a share buyback program worth $200 million, which is valid for three years. Since the inception of the program, the company has repurchased five million shares for $148 million.
In the past year, shares of this current Zacks Rank #3 (Hold) company have decreased 7.8% against the industry’s 22.2% increase.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Enerpac Tool Group Corp. EPAC presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EPAC delivered a trailing four-quarter average earnings surprise of 21.9%. In the past 60 days, the Zacks Consensus Estimate for Enerpac’s fiscal 2024 earnings has increased 2.3%. The stock has risen 14.5% in the past year.
Lincoln Electric Holdings, Inc. LECO presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 4.4%.
The Zacks Consensus Estimate for LECO’s 2023 earnings has increased 0.2% in the past 60 days. Shares of Lincoln Electric have jumped 35.4% in the past year.
Crane Company CR currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 29.8%.
In the past 60 days, the Zacks Consensus Estimate for Crane’s 2023 earnings has remained steady. The stock has risen 44.7% in the past year.
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Lincoln Electric Holdings, Inc. (LECO) : Free Stock Analysis Report
Kennametal Inc. (KMT) : Free Stock Analysis Report
Crane Company (CR) : Free Stock Analysis Report
Enerpac Tool Group Corp. (EPAC) : Free Stock Analysis Report
