Here's Why You Should Retain ITT Stock in Your Portfolio Now

ITT Inc. ITT is well-poised for growth in the near term, courtesy of strength across its segments and strong operational execution. The company's efforts to reward its shareholders handsomely add to its appeal.

Based in New York, ITT is a global leader in multiple high-technology engineering and manufacturing industries. It engages in the design, manufacture and sale of a wide range of engineered products and services.

ITT currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 1.4%.

Let’s discuss the factors that should influence investors to retain this company for the time being.

Business Strength: ITT is poised to gain from strength across its segments. The company is benefiting from higher sales volume and robust order growth. Its Industrial Process segment is gaining from strength in the short-cycle business within the energy and industrial markets. Growth in pump projects within the energy and chemical markets also bodes well for the segment. An increase in component and connector sales within the aerospace and defense markets is aiding the Connect & Control Technologies segment. Also, the acquisition of kSARIA augurs well for the segment. 

Solid momentum in the friction OEM (original equipment manufacturer), aftermarket and KONI businesses is driving the Motion Technologies (MT) segment. Strong demand for the company’s brake components and specialized sealing solutions, shock absorbers and damping technologies in the OEM and rail transportation markets is likely to drive the MT segment’s performance in the quarters ahead.

Expansion Initiatives: ITT solidifies its product portfolio and leverages business opportunities through asset additions. In September 2024, it acquired kSARIA Parent, Inc. The acquisition will enhance its portfolio of connectivity solutions for the defense and aerospace end markets, technological capabilities and market reach, driving growth and operational efficiency. The January 2024 acquisition of privately held Svanehøj Group A/S (Svanehøj) for approximately $395 million expanded ITT’s offerings, particularly in the marine pumps market. 

The acquisition of Micro-Mode Products, Inc. in May 2023 expanded ITT's product portfolio and customer base, specifically for long-term defense programs. It also grew its North America connectors platform, enhancing the CCT segment. The company acquired Clippard Instrument Laboratories’ product lines in August 2022. The stainless steel, brass and aluminum cylinders and volume tanks contributed by this acquisition expanded ITT’s compact automation product range, targeting the robotics, packaging and automation end markets. Acquisitions contributed 1.2% to the company’s sales growth in fourth-quarter 2024.

Rewards to Shareholders: ITT has a strong balance sheet that has enabled it to reward its shareholders handsomely through dividend payments and share buybacks. During 2024, the company paid out dividends of $104.7 million (up 9.3% year over year) and repurchased shares worth $104.5 million (up 74.2% year over year). The quarterly dividend rate was hiked 10% in February 2025. In October 2023, ITT’s board approved a $1 billion share repurchase program for an indefinite time.

Downsides of ITT

High Costs: ITT has been dealing with the negative impact of high operating costs and expenses over time. In 2024, the company’s cost of sales rose 9.6% year over year. While sales and marketing expenses rose 18.2% year over year in the same period, general and administrative expenses increased 0.7%. High raw material costs may affect margins and profitability in 2025.

Forex Woes: ITT's international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar is likely to require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry. In 2024, foreign currency translation reduced revenues by $24.7 million.

Stocks to Consider

Some better-ranked companies are discussed below.

DNOW Inc. DNOW currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DNOW delivered a trailing four-quarter average earnings surprise of 30.4%. In the past 60 days, the Zacks Consensus Estimate for DNOW’s 2025 earnings has increased 10.2%.

Dover Corporation DOV presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 5.3%.

In the past 60 days, the consensus estimate for DOV’s 2025 earnings has increased 0.4%.

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 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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