Even though the resurgence of the COVID-19 cases continues to pose a threat to the pace of global economic recovery, industrial activities continue to rise. According to Federal Reserve data, industrial production increased 0.9% in July after moving up 0.2% in June.
The Senate passed a bipartisan infrastructure bill on August 10, and House Speaker Nancy Pelosi, D-Calif., said on August 24 that she is “committing to pass the bipartisan infrastructure bill by September 27.” This is expected to drive the demand for industrial goods.
Given this backdrop, we think it could be wise to bet on quality industrial goods stocks Agilent Technologies, Inc. (A) and National Instruments Corporation (NATI). They have an overall A (Strong Buy) rating in our proprietary POWR Ratings system.
Agilent Technologies, Inc. (A)
Operating for more than two decades, Santa Clara, Calif.-based A functions primarily through Life Sciences and Applied Markets; Diagnostics, Genomics, and Agilent CrossLab segments. In addition, its life sciences and applied markets segment offer application-focused solutions, including instruments and software.
A signed a worldwide distribution agreement with Visiopharm today, enabling it to co-market Visiopharm’s portfolio of CE-IVD marked artificial intelligence (AI)-driven precision pathology software. This is expected to help expand the company’s product portfolio in the growing digital pathology market.
A’s net revenue increased 25.8% year-over-year to $1.59 billion in the third quarter, ended July 31, 2021. Its income from operations came in at $336 million, up 46.1% year-over-year. While its non-GAAP net income increased 38.7% year-over-year to $337 million, its non-GAAP EPS was t $1.10, up 41% year-over-year.
Analysts expect A’s revenue and EPS to increase 18.4% and 31.4%, respectively, year-over-year to $6.32 billion and $4.31 in its fiscal year 2021. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 52.1% in price to close yesterday’s trading session at $175.45.
A’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
A has a B grade for Value, Growth, Stability, Sentiment, and Quality. Within the Medical-Diagnostics/Research industry, it is ranked #1 of 56 stocks. Click here to see the additional POWR Rating for Momentum for A.
Note that A is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Growth portfolio. Learn more here.
National Instruments Corporation (NATI)
NATI offers a broad portfolio of software-centric platforms and systems to engineers and scientists like NI LabVIEW, NI VeriStand, NI InsightCM, and NI DIAdem. In addition, it serves software-connected systems in the semiconductor, transportation and aerospace, defense, and government (ADG) industries. NATI is based in Austin, Tex.
Seagate Technology Holdings plc (STX) and NATI collaborated in July 2021 to enhance data storage and transfer services, including delivering a first-of-its-kind advanced driver-assistance systems (ADAS) record offering. Together, they are expected to build a comprehensive portfolio for data storage. As a result, STX could witness increasing demand for the solutions.
NATI’s non-GAAP total revenues increased 15.3% year-over-year to $347.43 million for the second quarter, ended June 30, 2021. Its non-GAAP operating income increased 37.6% year-over-year to $59.89 million. Also, its non-GAAP net income increased 38.6% year-over-year to $46.81 million, while its non-GAAP EPS came in at $0.35, representing a 34.6% year-over-year rise.
For its fiscal year 2022, NATI’s revenue and EPS are expected to grow 8.8% and 70.6%, respectively, year-over-year to $1.59 billion and $1.16 In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 8.4% in price to close yesterday’s trading session at $42.12.
NATI’s strong fundamentals are reflected in its POWR ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.
In addition, it has a B grade for Growth, Stability, and Quality. NATI is ranked #2 of 61 stocks in the Software – Business industry. Click here to see the additional POWR Ratings for NATI (Value, Sentiment, and Momentum).
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A shares were trading at $177.65 per share on Thursday morning, up $2.20 (+1.25%). Year-to-date, A has gained 50.60%, versus a 22.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Manisha Chatterjee
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...
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