Powell Industries Gains From Business Strength Amid Risks

Powell Industries, Inc. POWL has been benefiting from growth in energy transition projects, such as biofuels, carbon capture and hydrogen. A solid pipeline of projects supported by high investments in LNG, related gas processing and petrochemical processes have set Powell Industries apart as a leading supplier of critical electrical infrastructure.The company’s first-quarter fiscal 2025 (ended December 2024) results indicated strong year-over-year growth, with revenues growing 24.4% to $241.4 million, driven by persistent strength and healthy levels of project activity across these markets.The company’s increased participation across the electrical power value chain has enabled it to generate solid bookings from the electric utility and commercial markets. This has led to a strong backlog level, which was $1.3 billion while exiting the fiscal first quarter. New orders totaled $269 million in the fiscal first quarter compared with $198 million in the year-ago quarter.POWL remains committed to rewarding its shareholders handsomely through dividend payouts. The company used $3.2 million to distribute dividends in the first three months of 2025. In fiscal 2024, it paid dividends of $12.7 million, up 2.4% year over year. Also, in second-quarter fiscal 2025, it hiked its quarterly dividend by approximately 1%.POWL’s Price PerformanceImage Source: Zacks Investment ResearchIn the past year, this Zacks Rank #3 (Hold) company has gained 4.2% against the electronics manufacturing industry’s 17% decline.However, it has been dealing with the adverse impacts of high operating costs and expenses. For instance, in the first quarter of fiscal 2025, Powell Industries’ cost of sales climbed 24.8% year over year due to high raw material costs. Selling, general and administrative expenses rose 5.6% in the same period. The cost of sales, as a percentage of revenues, was 75.3% for the period.The company utilizes a variety of raw materials, including steel, copper, aluminum and various engineered electrical components, in its businesses. The persistence of supply-chain constraints for specifically engineered components might inflate costs and delay the delivery of products to its customers.3 Promising StocksSome better-ranked stocks from the same space are discussed below.Enersys ENS presently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank 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 #2 (Buy). 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.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Applied Industrial Technologies, Inc. (AIT): Free Stock Analysis Report AZZ Inc. (AZZ): Free Stock Analysis Report Enersys (ENS): Free Stock Analysis Report Powell Industries, Inc. (POWL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks