This is one of the many top companies that restructured and are based in Ireland, and it is a top industrial pick at Jefferies. With the housing market continuing to grow, the wide range of portfolio products at Ingersoll-Rand PLC (NYSE: IR) should continue to sell well. Many on Wall Street also see the stock as a good play on the replacement, upgrade and, ultimately, growth in the commercial and residential air conditioning markets. Trends in these markets have been highly correlated with overall commercial construction and are thus earlier in the cycle.
Ingersoll Rand has an outstanding portfolio of global brands and holds leading market share in all major product lines. The geographic and industrial diversity coupled with a large installed product base provides solid growth opportunities for the company within service, spare parts and replacement revenue streams.
The company reported mostly inline fourth-quarter results, with an improved operating performance that offset expected headwinds in the global economic environment and some currency issues. A year-over-year decrease in GAAP earnings was attributable to earnings from discontinued operations in fourth-quarter of 2014.
Investors receive a 2.5% dividend. Jefferies has a $65 price target, and the consensus estimate is $62.71. Shares closed on Friday at $51.32.
Last summer’s merger of two top packaging and container companies could provide an outstanding opportunity for investors, as the stock has been absolutely mauled since the merger. WestRock Co. (NYSE: WRK) is the completed and merged entity that combined old Rock-Tenn and MeadWestvaco. It is now the second-largest U.S. packaging company, valued at $10.7 billion, trailing only International Paper, with a market capitalization of just under $15 billion. WestRock is expected to generate net sales of $15.7 billion and adjusted EBITDA of $2.9 billion. This includes the impact of $300 million in estimated annual synergies to be achieved over three years.
Jefferies notes that the company announced a stock repurchase program last year of 40 million shares, equal to 15% of the shares outstanding. It also announced a very generous 17% increase in the dividend. The current dividend will be $1.50 per share or $0.375 per quarter.
Late last year, the company saw a flood of investment from some of the top hedge funds, with as many as 41 adding the stock to their portfolios. The company reported fiscal first-quarter 2016 net sales of $3.68 billion million, a rise of 46.4% compared to net sales of $2.51 billion in the fiscal first quarter of 2015.
WestRock investors will receive a 4.83% dividend. The Jefferies price target is $56. The consensus target is $70.56 and shares closed Friday at $31.03.
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While the landscape still looks scary, yet of all the indexes around the world, the United States and the S&P 500 may very well be the best performing this year. Investors with some dry powder may want to wade in and scale some buying on these top companies.