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Reasons to Add Teledyne Technologies (TDY) to Your Portfolio

Zacks Equity Research

Higher contracts from the Pentagon and other U.S. allies for Teledyne Technologies Incorporated’s TDY cost-effective defense solutions are a primary growth driver.

Moreover, solid backlog, strategic buyouts in digital imaging market and expanding prospects in instrumentation are likely to boost the company’s growth.

Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) stock an appropriate pick at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Growth Projections

The Zacks Consensus Estimate for 2019 earnings per share is pegged at $9.98 on $3.10-billion revenues. The bottom and the top line indicate an increase of 12.39% and 6.79% on a year-over-year basis, respectively.

The consensus mark for 2020 earnings is pegged at $11.03 per share on revenues of $3.23 billion. The bottom line suggests 10.47% growth on a year-over-year basis. Also, the top line calls for a 4.16% rise year over year.

The company’s long-term (three to five years) earnings growth is pegged at 7.50%.

Price Performance & Return on Equity (ROE)

In the past 12 months, Teledyne Technologies’ shares have rallied 47% compared with the industry’s rise of 20.2% and the Zacks S&P 500 composite’s increase of 4.7%

Price Performance (One Year)



ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. Teledyne Technologies’ ROE for the trailing 12 months is 15.09% compared with the industry’s 10.07%.

Debt/Capital & Current Ratio

Teledyne Technologies is consistently striving to preserve balance-sheet strength. Currently, the company has a current ratio of 1.63. Its financial strength will enable the company to meet near-term debt obligation. Its long-term debt-to-capital ratio is 23.93% compared with the Zacks S&P 500 composite’s 43.37% and the industry’s 26.45%.

Strategic Buyouts

Digital imaging market is experiencing significant growth on higher demand for medical imaging system in healthcare. To increase shares in this expanding market, Teledyne Technologies acquired the scientific imaging businesses of Roper Technologies for $225 million in February 2019. The acquired businesses provide a range of imaging solutions primarily for life sciences, academic research and customized OEM industrial imaging solutions. During the second quarter, the company submitted a binding offer to acquire the gas and flame detection business of 3M for $230 million in cash. The deal will enable the company to develop enhanced sophisticated instrumentation, digital imaging products and software, aerospace and defense electronics as well as engineered systems. Such acquisitions are expected to boost investors’ optimism in the stock.

Other Key Picks

Some other top-ranked stocks from the same industry are AAR Corp AIR, AeroVironment, Inc AVAV and HEICO Corporation HEI. Each stock holds a Zacks Rank #2 (Buy).

AAR Corp pulled off an average positive earnings surprise of 7.71% in the last four quarters. The Zacks Consensus Estimate for the company’s fiscal 2020 earnings moved up 1.15% to $2.62 in the past 60 days.

AeroVironment came up with an average positive earnings surprise of 86.67% in the last four quarters. The Zacks Consensus Estimate for the company’s fiscal 2020 earnings moved up 5.7% to $1.65 in the past 60 days.

HEICO pulled off an average positive earnings surprise of 10,07% in the last four quarters. The company’s long-term earnings growth is pegged at 13.95%

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