IDEX Corporation IEX is poised to benefit from strength in the Fluid & Metering Technologies segment. Strong momentum in the intelligent water business, driven by continued strength in the North American municipal market and rising governmental funding to support ongoing investments, bodes well for the segment. The segment’s organic revenues increased 3% on a year-over-year basis in the fourth quarter of 2024. The company expects overall organic revenues to increase 1-3% year over year in 2025.

The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. In September 2024, IDEX acquired Mott Corporation and its subsidiaries (Mott) for a cash consideration of $1 billion. This acquisition will expand the company’s applied materials science technology capabilities and will enable it to boost its micro-precision technology offerings in key markets such as semiconductor fabrication, medical technologies and water purification.

In December 2023, IEX acquired advanced material science solutions provider STC Material Solutions for $206 million. This buyout expanded the company’s growing expertise in the material sciences space. In the fourth quarter of 2024, acquisitions had a positive impact on sales of 6%.

IEX has been committed to rewarding shareholders through dividend payouts and share repurchases. For instance, in 2024, IDEX’s dividend payments totaled $205.3 million, up 7.7% year over year. It announced a hike of 7.8% in its quarterly dividend rate in May 2024.

IEX’s Price Performance

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In the past month, the Zacks Rank #3 (Hold) company has lost 4.5% compared with the industry’s 6.3% decline.

Despite the positives, weakness in the Health & Science Technologies segment due to softness in the life sciences, analytical instrumentation, automotive and semiconductor capital equipment markets raises concerns.

Escalating operating expenses have been a major concern for the company. For instance, its cost of sales recorded an increase of 9.7% year over year in the fourth quarter. Also, its selling, general and administrative expenses grew 14% year over year in the fourth quarter. As a percentage of sales, the metric increased 90 bps to 22.9% in the same period.

3 Promising Stocks

Some better-ranked stocks from the same space are discussed below.

Enersys ENS presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It has a trailing four-quarter earnings surprise of 2.2%, on average. The consensus estimate for ENS’ fiscal 2025 (ending March 2025) earnings has increased 2.3% in the past 30 days.

AZZ Inc. AZZ currently carries a Zacks Rank of 2. AZZ delivered a trailing four-quarter average earnings surprise of 15.2%. In the past 60 days, the Zacks Consensus Estimate for AZZ’s fiscal 2025 (ended February 2025) earnings has increased 0.7%.

Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 5.3%. The Zacks Consensus Estimate for AIT’s fiscal 2025 (ending June 2025) earnings has improved 0.3% in the past 30 days.

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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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