📈 Amphenol Corporation (NYSE:APH) has quietly dominated the industrial sector, delivering a jaw-dropping 19% annual return over the last 20 years. This means a $10,000 investment back in 2004 would be worth $324,000 today! What’s the secret to this success? A relentless focus on long-term growth through strategic acquisitions and smart financial management, while offering a modest 1.0% dividend yield. Though the yield seems low, the company’s commitment to growth has paid off handsomely.
💼 Amphenol’s growth is powered by its aggressive M&A strategy, with over 50 acquisitions in the past decade. The company has expanded its reach into booming sectors like automotive, defence, and IT. Recent acquisitions, such as Carlisle Interconnect Technologies, have further boosted revenue. In Q2 alone, Amphenol recorded $3.61 billion in sales, up 18%. These moves have solidified its reputation as an industrial powerhouse.
🤑 The company generated an impressive $528 million in free cash flow in Q2, equating to 95% of its adjusted net income. With a net leverage ratio of 1.2x and liquidity of $4.3 billion, Amphenol has mastered balancing growth, acquisitions, and financial stability. This ability to consistently generate cash gives them the flexibility to fund more acquisitions and grow even further.
🚀 Looking ahead, Amphenol’s forecast includes 16-19% sales growth in the coming quarter, with EPS set to grow by up to 15%. The company’s operating margins hit a record 21.3% in Q2, a testament to strong cost management. New orders of $4.1 billion signal continued demand in high-growth sectors like aerospace, defence, and mobile networks.
💡 While Amphenol’s stock is trading at a premium, its strong fundamentals make it a solid long-term performer. Investors may want to watch for a better entry point, but the company remains a top pick in the industrial sector.
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IMPORTANT: This article is of general nature only and readers should obtain advice specific to their circumstances from professional advisers.