AZZ Inc. (AZZ) shares have sold off recently creating an excellent value as estimates continue to rise. The electrical component maker also expanded into Canada this year.

Company Description

AZZ Incorporated is an electrical equipment and components manufacturer serving the global growth markets of power generation, transmission and distribution, and industrial markets.

The company is also a provider of hot dip galvanizing services to the steel fabrication market nationwide.

Record-Breaking Quarter

AZZ announced record levels of revenue, earnings, and backlog in its Sep 26 earnings announcement. Revenues spiked 27% to $103.3, the highest in company history.

Earnings for the quarter were 92 cents per share, a 39% year-over-year increase. Net income was an all-time high of $11.3 million.

AZZ’s backlog rose to $190.8 million, a 28% gain since the $149.2 million posted in the same quarter last year.

Trumping its Peers

AZZ is easily ahead of the competition in several key financial categories. The company’s net profit margin of 10% is easily above, the industry average.

The average ROE for its peers is 9.7%, while AZZ is returning over 24% on its equity. The company carries almost no debt with a debt to equity ratio of just 0.6 compared to the average of 10.9 times.

International Acquisition

Effective July 1st, AZZ acquired Blenkhorn and Sawle Ltd, a Canadian electrical equipment supplier. The $14 million purchase was primarily through cash with some assumption of short-term liabilities.

Blenkhorn and Sawle provide custom solutions to major utilities, mining, oil and gas, and the nuclear power industries.

The Chart

The earnings estimates for AZZ have been climbing. Given the recent sell off, or P/E contraction, the stock’s growth prospects are a value with a PEG ratio of 0.5, relative to the industry average of 0.6. Take a look at the chart below.

Content Courtesy: Zacks Investment Research

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