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EnerSys ENS is thriving on the back of strength across its segments and accretive acquisitions. The company’s consistent measures to reward its shareholders through dividends hold promise.
Headquartered in Pennsylvania, EnerSys engages in the manufacturing, marketing and distribution of various industrial batteries. Additionally, the company develops battery chargers and accessories, power equipment and outdoor cabinet enclosures. It also provides support services for clients. The company, which belongs to the Manufacturing – Electronics industry, currently carries a Zacks Rank #2 (Buy).
Let’s discuss the factors that are likely to continue benefiting this company.
Business Strength: Solid momentum in the Motive power segment, driven by increased sales of maintenance-free thin plate pure lead and lithium products, is aiding the company’s performance. Management expects the segment to benefit from increased shipments of lift trucks in the near term. Solid momentum in the aerospace and defense end markets is aiding the Specialty segment. The Energy Systems segment is benefiting from the expansion of U.S. communications networks, fueled by AI-driven data demand.
Enersys Price and Consensus
Enersys price-consensus-chart | Enersys Quote
Expansion Efforts: The company solidified its product portfolio and leveraged business opportunities by adding assets. In the third quarter of fiscal 2025 (ended December 2024), acquisitions boosted sales by 3%. In July 2024, ENS acquired Bren-Tronics, Inc. in an all-cash deal of $208 million. The acquisition strengthened the company’s position as a critical enabler of the energy transition and supported its growth in the growing military and defense end market.
In April 2023, EnerSys acquired the United Kingdom (UK)-based battery service and maintenance provider, Industrial Battery and Charger Services Limited (“IBCS”). The addition of IBCS has bolstered the company’s motive power service offerings and strengthened its presence in the U.K. market. It also augmented its comprehensive range of battery-related services, including installation and maintenance, to repair and replacement.
Rewards to Shareholders: ENS is committed to rewarding its shareholders handsomely. The company paid out dividends of $28.1 million in the first nine months of fiscal 2025. EnerSys also bought back its shares worth $113.9 million in the first nine months of fiscal 2025. The company hiked its quarterly dividend by 7% to 24 cents per share in August 2024. In March 2022, EnerSys announced a share repurchase program worth $150 million. Also in November 2024, the company authorized a new stock repurchase program worth $200 million. Both the buyback programs have no expiration date. Exiting the third quarter of fiscal 2025, the company was left to repurchase shares worth $219 million in aggregate.