Owing to rising costs and lingering logistic disruptions, industrial production in the U.S. missed consensus estimates for May 2022. However, it was still up 5.4% year-over-year. Moreover, according to Trading Economics, U.S. industrial production is expected to be around 3.2% approximately in 2023.
In addition, the demand for industrial goods and services remains significantly robust. Research shows that the global industrial services market is set to grow at a CAGR of 5.6% from 2022 to 2029.
Thus, investing in fundamentally sound industrial stocks DLH Holdings Corp. (DLHC) and Koç Holding A.S. (KHOLY) could be wise. These stocks are rated Strong Buy in our POWR Ratings system.
DLH Holdings Corp. (DLHC)
DLHC provides technology-enabled business process outsourcing, program management solutions, and public health research and analytics services in the United States. The company offers defense and veterans’ health solutions and logistics solutions.
On June 2, 2022, DLHC was awarded a contract to provide statistical, mathematical, and computational support for the National Institute of Environmental Health Sciences research. This should benefit the company.
For the second quarter that ended March 31, 2022, DLHC’s revenue increased 76.7% year-over-year to $108.67 million. Its net income increased 179.6% year-over-year to $7.18 million. Also, its EBITDA came in at $12.13 million, up 82.5% year-over-year.
Analysts expect DLHC’s revenue to be $395.50 million in 2022, representing a 60.7% year-over-year increase. The company’s EPS is expected to grow 102.7% year-over-year to $1.52 in 2022. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters. DLHC has gained 40.1% over the past year to close the last trading session at $14.98.
DLHC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
DLHC has an A grade for Growth, Value, and Sentiment and a B for Quality. It is ranked #3 out of 85 stocks in the B-rated Industrial – Services industry. Click here for the additional POWR Ratings for Momentum and Stability for DLHC.
Koç Holding A.S. (KHOLY)
Based in Istanbul, Turkey, KHOLY and its subsidiaries engage in energy, automotive, consumer durables, finance, and other businesses in Turkey and internationally. Its segments are the energy business; automotive business; consumer durables business; finance business; and other businesses.
On May 9, 2022, KHOLY’s CEO Levent Çakıroğlu said, “We are confident that we will further reinforce our company’s title as Ford Europe’s largest commercial vehicle manufacturer and build on our country’s global competitive advantage in the automotive industry.”
KHOLY’s consolidated revenue increased 165.4% year-over-year to TL152.11 billion ($8.70 billion) for the quarter that ended March 31, 2022. Its consolidated operating profit came in at TL19.34 billion ($1.11 billion), up 273.7% year-over-year. Moreover, its consolidated net profit for the period came in at TL6.71 billion ($383.89 million), up 217.7% year-over-year.
KHOLY’s revenue is expected to grow 21.7% year-over-year to $31.06 billion in 2022. Its EPS is expected to grow 7.8% per annum for the next five years. The stock has lost marginally year-to-date to close the last trading session at $10.33.
KHOLY has an overall A rating, which translates to a Strong Buy in our proprietary rating system. It has an A grade for Value, Momentum, and Sentiment and a B for Stability and Quality.
Within the same industry, KHOLY is ranked first. Click here to see the additional POWR Ratings for Growth for KHOLY.
DLHC shares were trading at $15.07 per share on Thursday morning, up $0.09 (+0.60%). Year-to-date, DLHC has declined -27.27%, versus a -20.77% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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