Graco Stock Exhibits Strong Prospects Despite Persisting Headwinds

Graco Inc. GGG is benefiting from strength in the Industrial and Expansion Markets segments. Higher demand for powder finishing and lubrication product lines is aiding the Industrial segment’s performance. Also, higher demand for vehicle services augurs well. The segment’s core sales increased 2% year over year in the first six months of 2025. Solid momentum in the semiconductor business, driven by an increasing order rate, is boosting the Expansion Markets segment. Favorable pricing actions also bode well for the segment. The segment’s core sales increased 4% year over year in the first six months.GGG remains focused on strengthening its competency through acquisitions. In July 2025, Graco acquired Color Service S.r.l. (Color Service), which has been added to its Industrial segment. The addition of Color Service’s automated dosing technology will enhance the company’s powder handling portfolio and expand its reach into new industries.In November 2024, Graco acquired Corob S.p.A. (Corob), which has been added to its Contractor segment. The inclusion of Corob’s advanced product line, backed by strong design and manufacturing expertise, strengthens the company’s customer offerings and its position in the paint and coating machinery market. In August 2024, Graco completed the acquisition of PCT System. This buyout strengthened the company’s White Knight business and expanded its presence in the semiconductor market. Acquisitions had a contribution of 6% to GGG’s sales in the second quarter of 2025.GGG’s shareholder-friendly policies are encouraging. The company paid out dividends worth $92.2 million to its shareholders in the first six months of 2025, reflecting an increase of 7.2% year over year. Also, Graco repurchased shares worth $361 million in the same period. In December 2024, the company hiked its quarterly dividend by 7.8% to 27.5 cents per share.GGG’s Price PerformanceIn the past month, this Zacks Rank #3 (Hold) company’s shares have gained 2.8% compared with the industry’s 0.7% growth.Image Source: Zacks Investment ResearchHowever, weakness in the Contractor segment is concerning for Graco. High housing costs and lower construction projects in North America are affecting the segment’s performance. Reduced demand in the home center channel, due to lower foot traffic and decreased consumer activity arising from softness in the U.S. housing and remodeling markets, is concerning as well. The segment’s core sales declined 3% year over year in the first six months of 2025.Escalating costs and expenses have been a concern for GGG over time. In the first six months of 2025, the company’s general and administrative expenses increased 7.3% year over year. Also, it’s cost of sales increased 9.3% year over year in the first half of 2025. The metric, as a percentage of net sales, increased 170 basis points year over year.Stocks to ConsiderSome better-ranked companies are discussed below.Flowserve Corporation FLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.FLS delivered a trailing four-quarter average earnings surprise of 5.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 4.7%.Crane Company CR presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 7.5%.In the past 60 days, the consensus estimate for CR’s 2025 earnings has increased 4%.Dover Corporation DOV presently carries a Zacks Rank of 2. DOV delivered a trailing four-quarter average earnings surprise of 4%.In the past 60 days, the consensus estimate for DOV’s 2025 earnings has inched up 1.2%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dover Corporation (DOV): Free Stock Analysis Report Flowserve Corporation (FLS): Free Stock Analysis Report Graco Inc. (GGG): Free Stock Analysis Report Crane Company (CR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks