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MRC Global Inc. MRC recently entered into a deal to divest its Canada business to Emco Corporation. The financial terms of the transaction have been kept under wraps.
Based in London, Emco is engaged in providing products and services for plumbing, waterworks, HVAC, irrigation, industrial, fire protection and oilfield supply projects. The company has a network of more than 250 profit centers.
The divestment of the Canada business will help MRC Global to focus on its core businesses while supporting its capital allocation priorities. It supports the company’s strategy to focus on key regions and product offerings that offer the greatest potential for growth and profitability. MRC expects to use the cash proceeds of the transaction, net of modest taxes, to reduce its debt. The divestiture is expected to positively impact the company's adjusted gross margins and adjusted EBITDA margin.
The transaction is expected to close in the first half of 2025, subject to closing approvals.
MRC’s Zacks Rank and Price Performance
An increase in energy transition activities is benefiting the MRC Global’s Downstream, Industrial and Energy Transition sector. The company’s efforts to return value to shareholders add to its appeal.
MRC currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 21.5% compared with the industry’s 17.2% growth.
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MRC’s performance is being affected by weakness in the Gas Utilities and PTI sectors. While continued customer destocking and delayed project activity are affecting the Gas Utilities sector, a decrease in rig counts in the U.S. oil field due to the widespread consolidation of producers, particularly in the Permian Basin, is ailing the Production & Transmission Infrastructure sector.
Stocks to Consider
Some better-ranked companies are discussed below.
Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has increased 8.4%.
RBC Bearings Incorporated RBC presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 2.5%.
In the past 60 days, the consensus estimate for RBC’s fiscal 2025 earnings has increased 0.5%.
Kadant Inc. KAI presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 17.2%.
The Zacks Consensus Estimate for KAI’s 2024 earnings has increased 1.8% in the past 60 days.