Stock of the Day

November 29, 2019

Parker-Hannifin (PH)

$667.06
-$28.40 (-4.1%)
Market Cap: $89.52B

About Parker-Hannifin

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates through two segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers sealing, shielding, thermal products and systems, adhesives, coatings, and noise vibration and harshness solutions; filters, systems, and diagnostics solutions to ensure purity and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors used in fluid and gas handling; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine build-up ducting, engine exhaust nozzles and assemblies, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, avionics, sensors, pneumatic control components, thermal management products, fire detection and suppression systems and components, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio.

Parker-Hannifin Bull Case

Here are some ways that investors could benefit from investing in Parker-Hannifin Co.:

  • Parker-Hannifin Co. recently reported a strong quarterly earnings per share (EPS) of $6.53, surpassing the consensus estimate of $6.23 by $0.30, indicating robust financial performance.
  • The company has a high return on equity of 27.34%, which suggests effective management and a strong ability to generate profits from shareholders' equity.
  • With a current stock price of $700.13, Parker-Hannifin Co. has shown a 0.9% increase, reflecting positive market sentiment and potential for further growth.
  • The company declared a quarterly dividend of $1.63, translating to an annualized dividend of $6.52 and a yield of 0.93%, providing a steady income stream for investors.
  • Analysts have a consensus rating of "Moderate Buy" for Parker-Hannifin Co., with a price target averaging $729.18, indicating potential upside in the stock price.

Parker-Hannifin Bear Case

Investors should be bearish about investing in Parker-Hannifin Co. for these reasons:

  • The stock has a relatively high price-to-earnings (P/E) ratio of 28.98, which may suggest that it is overvalued compared to its earnings, potentially limiting future price appreciation.
  • Parker-Hannifin Co. has a beta of 1.45, indicating higher volatility compared to the market, which could lead to larger price swings and increased risk for investors.
  • Despite a strong performance, the company's net margin of 15.87% may be lower than some competitors, raising concerns about its profitability in a competitive landscape.
  • Recent analyst reports have shown mixed sentiments, with some firms lowering their price targets, which could indicate uncertainty about the company's future performance.
  • The company operates in diverse industrial and aerospace markets, which can be subject to economic fluctuations, potentially impacting its overall stability and growth prospects.

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