The adoption of advanced technologies and robust demand are boosting the industrial services sector. Therefore, investors could consider adding quality stocks Vinci SA (VCISY), Jacobs Solutions (J), and Sterling Infrastructure (STRL) to their watchlists.
The increase in demand for predictive maintenance services is expected to propel the growth of the industrial services market. The continual monitoring of the status of industrial equipment while it is in use is referred to as predictive maintenance.
The global industrial services market is expected to grow to $40.75 billion in 2027 at a CAGR of 5.2%.
Moreover, partnerships and collaborations have emerged as significant trends within the application testing services market, as major companies recognize the value of strategic alliances to enhance their position in this competitive sector. Industrial services providers are actively engaging in partnerships to strengthen their foothold and expand their reach within the industry.
In addition, the adoption of advanced technologies, such as artificial intelligence, robotics, and the Internet of Things (IoT) have the potential to improve overall efficiency and productivity while reducing costs, which should bode well for the sector.
Take a look at the stocks mentioned above:
Vinci SA (VCISY)
Headquartered in Nanterre, France, VCISY engages in concessions, energy, and construction businesses worldwide.
VCISY’s trailing-12-month EBITDA margin of 15% is 11.2% higher than the 13.50% industry average. Its trailing-12-month net income margin of 6.81% is 7.3% higher than the 6.35% industry average.
VCISY pays $1.08 annually as dividends which translates to a yield of 5.93% at the current price. Its four-year average dividend yield is 2.75%. Its dividend payouts have grown at 12.9% CAGR over the past three years.
During the fiscal year that ended December 31, 2022, VCISY’s revenue increased 24.9% year-over-year to €61.68 billion ($67.21 billion). Net income increased 101.2% year-over-year to €4.42 billion ($4.82 billion) and earnings per share increased 65.6% year-over-year to €7.47.
Analysts expect VCISY’s revenue for the fiscal second quarter ending June 2023 to increase 16.4% year-over-year to $18.64 billion. Also, it has surpassed revenue estimates in each of the trailing four quarters, which is remarkable.
Shares of VCISY have gained 40.2% over the past nine months to close the last trading session at $27.82.
VCISY’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Stability and a B in Momentum and Sentiment. It is ranked #18 out of 81 stocks in the A-rated Industrial - Services industry.
Beyond what is stated above, we’ve also rated VCISY for Growth, Value, and Quality. Get all VCISY ratings here.
Jacobs Solutions Inc. (J)
J provides consulting, technical, scientific, and project delivery services for the government and private sectors worldwide. It operates through three segments: Critical Mission Solutions; People & Places Solutions; and PA Consulting.
On May 31, 2023, J announced an expansion of their partnership, focused on leveraging Palantir's AI capabilities to commercialize new AI solutions spanning critical infrastructure, advanced facilities, supply chain management, and more.
J’s trailing-12-month asset turnover ratio of 1.03x is 29.4% higher than the 0.80x industry average.
The company pays an annual dividend of $1.04, which translates to a yield of 0.86% at the current price level. It has a four-year average dividend yield of 0.73%.
J's revenues increased 6.4% year-over-year to $4.08 billion in the fiscal second quarter that ended March 31, 2023. Its operating income increased 74.4% year-over-year to $289.86 million. Also, its earnings per share increased 150% year-over-year to $1.70.
Street expects J’s revenue for the fiscal third quarter ended June 2023 to increase 6.6% year-over-year to $4.08 billion. Its EPS is expected to be $1.84 for the same quarter. Also, it has surpassed EPS and revenue estimates in each of the trailing four quarters.
The stock has gained 7.3% over the past three months to close the last trading session at $121.18.
J’s robust prospects are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
J has a B grade for Momentum, Stability, and Sentiment. It is ranked #12 in the same industry.
Click here to see the additional POWR Ratings for J (Growth, Quality, and Value).
Sterling Infrastructure, Inc. (STRL)
STRL engages in the e-infrastructure, transportation, and building solutions primarily in the Southern United States, the Northeastern and Mid-Atlantic United States, the Rocky Mountain states, California, and Hawaii.
STRL’s trailing-12-month asset turnover ratio of 1.35x is 69.3% higher than the 0.80x industry average. Its trailing-12-month CAPEX/Sales of 3.33% is 16.6% higher than the 2.86% industry average.
STRL’s revenues increased 10.3% year-over-year to $403.58 million in the fiscal first quarter, which ended March 2023. Net income attributable to STRL increased 2.1% year-over-year to $19.65 million. Also, net income per share attributable to STRL remained flat at $0.64.
STRL’s EPS for the fiscal second quarter ending June 2023 is expected to increase 7.8% year-over-year to $0.93. Its revenue is expected to be $494.93 million in the same quarter. Also, it has surpassed revenue and EPS estimates in each of the trailing four quarters.
The stock has gained 162.9% over the past year to close the last trading session at $56.46.
STRL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
STRL also has a B grade for Momentum, Sentiment, and Quality. It is ranked #20 in the same industry.
To access STRL’s additional Momentum, Stability, and Growth grades, click here.
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VCISY shares were trading at $28.07 per share on Friday afternoon, up $0.25 (+0.90%). Year-to-date, VCISY has gained 15.06%, versus a 16.29% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
3 Industrial Service Stocks to Add to Your July Watchlist StockNews.com
