This industrial company is forecasted to grow at an annual rate of 20% over the next five years.
Harsco Corporation (HSC)
From Upside
Harsco Corporation (HSC) is generating strong results in its rail business, reflecting increased global demand for equipment and after-market parts. Its industrial unit is benefiting from robust demand for commercial boilers and industrial grating. A sizable order backlog and organizational moves should help sustain growth.
Last month, Harsco sold its heat-exchangers unit for $592 million and acquired a specialty waste company for $625 million. The acquisition adds roughly $300 million in annual sales and boosts exposure to the high-margin hazardous waste market.
The stock earns a Quadrix® Overall score of 92, keyed by a 91 in Earnings Estimates. Harsco rallied after delivering a beat-and-raise report for the March quarter. Per-share earnings jumped 32% and topped expectations by 28%. Management raised its full-year guidance range for per-share earnings to $1.35 to $1.53, implying at least 3% growth—a conservative target, in our view. Harsco also increased its guidance for free cash flow and return on invested capital.
Harsco is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, June 2019