Why You Should Add Agilent (A) to Your Portfolio Right Now

Agilent Technologies (A) is an original equipment manufacturer (OEM) of a broad portfolio of test and measurement products serving multiple end markets. The company’s portfolio and increased focus on segments with higher growth potential is a big positive. The company also enjoys a robust presence in the health care market.

A few recent developments bode well for the company’s growth.

One such development is the FDA’s approval for a cancer diagnostic, PD-L1 IHC 28-8 pharmDx. The test will be used in cases of urothelial carcinoma (“UC”) and squamous cell carcinoma of the head and neck (“SCCHN”).

The PDL1 IHC 28-8 pharmDx test has already been approved for melanoma as well as non-squamous, non-small-cell lung cancer (“NSCLC”). It has now been approved for UC and SCCHN patients too. The test enables physicians in the United States to identify UC and SCCHN patients, who still have disease progression on or after platinum-based chemotherapy and are most likely to benefit from treatment with Opdivo.

We are encouraged by the company’s efforts to develop new assays for cancer treatment.The new assay will help Agilent to cash in on the fast-growing health care cancer-diagnostics segment.

Also, Agilent has an impressive record of returning cash to its shareholders through share buybacks and regular dividend payouts. In the fiscal third quarter, Agilent did not repurchase any share but paid out $42 million as dividends.

Moreover, the recently acquired Cobalt Light Systems will allow Agilent to strengthen its presence in the high-growth Raman spectroscopy market. The deal complements Agilent’s own product expansion efforts, with a promise to offer better services to its pharmaceutical and biopharma customers.

An Outperformer

A look at the company’s price trend reveals that the stock has had an impressive run on the bourse year to date. Agilent has gained 46.2%, significantly outperforming the industry’s gain of 43.7%.

Northward Estimate Revisions

For the current fiscal year 2017, 10 estimates have moved north over the past 60 days against no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current year has increased 4.5%.

Strong Growth Prospects

The company’s Zacks Consensus Estimate for fiscal 2017 earnings of $2.32 reflects year-over-year growth of 17.02%. Moreover, earnings are expected to register 11.83% growth in 2018. The stock has long-term expected earnings per share growth rate of 9.8%.

Agilent Technologies, Inc. Price and Consensus

 

Agilent Technologies, Inc. Price and Consensus | Agilent Technologies, Inc. Quote

Zacks Rank & Other Stocks to Consider

Currently, Agilent has a Zacks Rank #2 (Buy). Other top-ranked in the broader technology sector are Applied Materials, Inc. AMAT, sporting a Zacks Rank #1 (Strong Buy), and NVIDIA Corporation NVDA and ASML Holding N.V. ASML, holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for Applied Materials, NVIDIA Corporation and ASML Holding N.V. is projected to be 17.1%, 10.3% and 21.4%, respectively.

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