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Parker-Hannifin Corporation PH has been experiencing strength in commercial and military end markets across both OEM and aftermarket channels. The Aerospace Systems segment’s organic sales increased 18% year over year in the third quarter of fiscal 2024 (ended March 2024).

In the quarters ahead, the segment is expected to benefit from solid demand for its products and aftermarket support services in general aviation and military end markets. The company expects the Aerospace Systems segment’s organic sales to increase approximately 15% from the year-ago levels in fiscal 2024.

The company intends to strengthen and expand its businesses through acquisitions. Its acquisition of Meggitt expanded its presence in the United Kingdom, thereby positioning it well to provide a broader suite of solutions for aircraft, and aero-engine components and systems. Acquisitions boosted the company’s sales by 3.4% in the first nine months of fiscal 2024.

Parker-Hannifin’s unique Win Strategy, which focuses on driving its organic and long-term growth, also supports its margin performance. In the fiscal third quarter, PH’s adjusted operating margin increased 150 basis points year over year to 24.7%.

PH remains committed to rewarding its shareholders through dividend payouts. For instance, in the first nine months of fiscal 2024, it rewarded shareholders with dividends of $571.6 million, indicating an increase of 11.4% year over year. Also, it hiked its quarterly dividend rate by 10% in April 2024.

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In the past six months, this Zacks Rank #3 (Hold) company's shares have gained 13.7% compared with the industry’s 3.4% growth.

Despite the positives, the company has been witnessing challenging conditions in off-highway and transportation end markets, which have been hurting its Diversified Industrial North America segment’s performance. The segment’s organic sales fell 4.6% year over year in the fiscal third quarter.

Also, a weak liquidity position remains a concern for the company. Exiting the fiscal third quarter, the company had cash and cash equivalents of $405.5 million, much lower than its current debt and short-term maturities of about $4.1 billion.

Stocks to Consider

Some better-ranked companies from the same space are discussed below:

Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 8.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has improved 0.9% in the past 60 days. The stock has risen 9.8% in the past six months.

Flowserve Corporation FLS presently sports a Zacks Rank of 1 and has a trailing four-quarter earnings surprise of 21.7%, on average.

The consensus estimate for FLS’ 2024 earnings has increased 0.8% in the past 60 days. Shares of Flowserve have gained 17.1% in the past six months.

Ingersoll Rand Inc. IR presently carries a Zacks Rank #2 (Buy). IR delivered a trailing four-quarter earnings surprise of 12.9%, on average.

The Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has increased 2.2% in the past 60 days. Its shares have risen 21.8% in the past six months.

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