MRC Global Inc. MRC is a promising investment option at the moment. The company currently sports a Zacks Rank #1 (Strong Buy) and has witnessed positive earnings estimate revisions in the past 60 days.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Reasons to Add the Stock
Solid Business Strategy: MRC Global’s existing business strategy focuses on growth, margin improvement and long-term customer relation development. The company is steadily expanding market share on the back of several preferred supplier contract executions. Through this strategy, it intends to become the leading pipe, valve and fitting products supplier of the global energy industry.
Upbeat Top Line Prospects: MRC Global’s revenues have been improving over the past few quarters. Higher customer activity and efficient project deliveries are likely to boost upstream sales in the quarters ahead. Increased demand from gas utility, transmission and gathering customers is expected to buoy midstream revenues. Meanwhile, recently-inked business contracts are expected to strengthen downstream sales in the upcoming quarters.
Per our estimates, MRC Global’s revenues will grow 16.9% year over year in 2018 while expand 7.8% in 2019.
Profitability on Rise: The company is steadily improving profitability, courtesy of robust top-line performances, greater operational efficacy, diligent cost-saving moves and lower corporate tax rates.
Over the past 60 days, the Zacks Consensus Estimate for earnings has moved up 2.4% to 87 cents for 2018 and 4.2% to $1.25 for 2019. This reflects positive sentiments in the market. Per our estimates, the company’s earnings will grow 2800% year over year in 2018 and 44.4% in 2019.
Beneficial Contracts: MRC Global believes that ongoing business contracts are likely to boost financials in the quarters ahead. For instance, the five-year long maintenance, repair and operations agreement signed with Exxon Mobil Corp. XOM (March 2017) is predicted to drive the company's yearly sales by nearly $50 million for the next five years, starting 2018. Notably, contracts secured from PBF Energy Inc. PBF (April 2017) and NiSource, Inc. NI (July 2017) will benefit the company going forward.
Shareholders’ Stance: MRC Global provides returns to shareholders in the form of dividend and share buyback offers. In first-quarter 2018, the company paid dividends worth $6 million to shareholders. Under the ongoing $100-million share-repurchase program (scheduled to close on Dec 31, 2018), the company repurchased $30-million common stock at an average price of $17.39 per share in the first quarter and bought another $20-million stock subsequent to the reported quarter.
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