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Dover (DOV) Confirms ’16 Expectations, Provides ’17 View


Given its strong fourth-quarter business activity, Dover Corporation DOV confirmed its 2016 EPS expectations and provided preliminary guidance for 2017. Recovery in drilling and artificial lift markets, along with consistent solid activity in Printing & Identification platform, synergies from Wayne acquisition and recovery in North American upstream oil & gas markets will help drive Dover’s results.

Dover reiterated its full-year 2016 adjusted EPS range of $3.00−$3.05. However, this excludes a 31 cents net benefit onthe Tipper Tie disposition, dilution of 5 cents from the Wayne acquisition, and a one-time charge of 9 cents. Including these one-time items, the company expects full-year 2016 earnings from continuing operations to be in the range of $3.17–$3.22 per share.

Dover has also initiated guidance of $3.40–$3.60 for full-year 2017 earnings per share from continuing operations. This guidance is based on expected full-year revenue growth in the range of 10%–12%, comprised of organic revenue growth of 3%–5%, and acquisition growth of approximately 10%. These will be somewhat offset by a 2% impact from currency and a 1% impact from dispositions.

Dover Corporation Price

Dover Corporation Price | Dover Corporation Quote

Dover anticipates its Printing & Identification businesses to continue to perform well in 2017. Further, its drilling and artificial lift markets continue to recover. These factors will help offset lingering weakness in longer cycle oil & gas exposed markets, along with persistent headwinds in its retail refrigeration business related to production inefficiencies. Further, the Wayne buyout will assist in capturing market opportunities and synergies ahead of prior-timing expectations, which will drive its results.

Dover expects its revenue and earnings will grow in the majority of its businesses. Moreover, recovery in North American upstream oil & gas markets, recent acquisitions and restructuring activities in 2016 will provide significant carryover benefits to the company in the 2017. Overall these factors position Dover well for double-digit EPS growth in 2017.

In fact, Dover outperformed the Zacks categorized Machinery-General Industrial industry over the past one year. The stock gained 41.7%, more than the industry’s gain of 37.8% over the same time frame.

Zacks Rank & Key Picks

Dover currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector include Altra Industrial Motion Corp. AIMC, RBC Bearings Incorporated ROLL and ABB Ltd. ABB.

Altra Industrial Motion sports a Zacks Rank #1 (Strong Buy) and has an impressive track record of earnings surprise with an average positive earnings surprise of 8.06% for the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here..

RBC Bearings also boasts a Zacks Rank #1 and has an average earnings surprise of 1.60% for the trailing four quarters. ABB Ltd., another Zacks Rank #1 stock, has an average positive earnings surprise of 23.50% for the past four quarters.

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