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Crane Poised for Growth on Solid Near & Long-Term Prospects


We issued an updated research report on Crane Co. CR on Jun 14. The company manufactures engineered industrial products and supplies them to its customers in North and South America, Europe, the Middle East, Asia and Australia.

Over the last three months, shares of this Zacks Rank #2 (Buy) company yielded 1.98% return, outperforming the gain of 0.03% recorded by the Zacks categorized Diversified Operations industry.

Crane is committed toward rewarding its shareholders handsomely through lucrative quarterly dividends. In first-quarter 2017, the company paid dividends worth $19.6 million. Notably, such disbursements are also reflective of the company’s strong cash position. Over the long term, the company targets achieving total payout ratio of 40−50%.

Additionally, we believe that Crane is poised to grow on the back of its diversified product portfolio, large client base and organic and inorganic initiatives. It anticipates increase in demand for productivity solutions in Payment & Merchandising Technologies segment, high growth aerospace programs in Aerospace & Electronics, recovering orders in Fluid Handling and strengthening end-markets in Engineered Materials in the long run. Backed by these positives, the company aims to achieve 10% average annual earnings per share growth and free cash flow conversion of 100% or more of net income.

For 2017, Crane increased the lower-end of its previously issued earnings guidance of $4.30−$4.55 per share by 5 cents to $4.35−$4.55. Core sales will likely be flat to up 2%.

Over the last 60 days, the Zacks Consensus Estimate on the stock increased 1.4% to $4.50 for 2017 and 2.1% to $4.95 for 2018. These estimates represent year-over-year growth of 6.32% for 2017 and 9.97% for 2018.

Crane Company Price and Consensus

Crane Company Price and Consensus | Crane Company Quote

Other Stocks to Consider

Crane currently has a $4.69 billion market capitalization.

Other stocks worth considering in the diversified operations industry include Hitachi Ltd. HTHIY, Barloworld Ltd. BRRAY and Federal Signal Corporation FSS. While Hitachi sports a Zacks Rank #1 (Strong Buy), both Barloworld and Federal Signal carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hitachi’s earnings estimates for fiscal 2017 were revised upward in the last 60 days. Also, the company posted a positive earnings surprise of 158.49% over the last four quarters.

Barloworld’s earnings estimates for fiscal 2017 and fiscal 2018 were revised upward in the last 60 days.

Federal Signal reported better-than-expected results in the last quarter, with a positive earnings surprise of 6.67%. Also, earnings estimates for 2017 and 2018 increased over the last 60 days.

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