On May 6, 2023, Boston Partners announced its increase in stake of LCI Industries (NYSE:LCII) by 0.6% in the fourth quarter of the previous fiscal year. This comes as a positive move for the fund since LCI Industries has been faring well despite recent struggles due to market conditions resulting in slow sales.
Following its quarterly earnings announcement on February 14th, it was reported that LCI Industries had a net margin of 7.59% and a return on equity of 28.95%. Though the company reported a loss of ($0.68) EPS for the same quarter, their revenue stood at $894.35 million.
The company specializes in manufacturing components for OEMs catering to recreational vehicles and manufactured homes among other segments. The company operates through two segments: OEM and Aftermarket, with the former being the major revenue driver.
Speaking of their business model, LCI Industries boasts an extensive application base as they supply components to various modes of transport, be it trucks or boats used to haul equipment or livestock. They also cater to clients in modular housing and manufactured home segments which gives them quite a lot of breadth when it comes to market reach.
Though recent years have been tough for businesses operating in this segment due to increasing competition from new entrants and restricted demand caused by adverse economic conditions around the world, some companies like LCI Industries have managed to buck this trend with their innovative products and focus on R&D.
Given the forecasted EPS growth rate predicted by equities analysts on behalf of LCI Industries coupled with Boston Partners taking an increased stake in the company ultimately raising its worth considerably, it is apparent that investors seem confident about the future prospects and resilience of LCI Industries even amidst challenging market conditions.
LCI Industries: An Attractive Investment Opportunity for Income-Oriented Investors
LCI Industries: A Promising Investment Opportunity?
Investment opportunities can be found in many different places, but one company that is catching the attention of investors lately is LCI Industries. With a strong track record of growth and a diverse range of products, this manufacturer and supplier of components for recreational vehicles and manufactured homes has recently seen increased interest from large institutional investors.
As reported on May 6, 2023, Raymond James Trust N.A., State of Alaska Department of Revenue, CWM LLC, Alliancebernstein L.P., and Eaton Vance Management all added to their positions in LCI Industries during the past year. These investments have helped boost the stock’s value to $111.19 per share on the New York Stock Exchange (NYSE) at market open on May 7th.
LCI Industries has both OEM and Aftermarket segments which allows them to offer components for buses, trailers used to haul boats/livestock/equipment/other cargo,trucks,pontoon boats,trains, manufactured homes,and modular housing. This makes the company’s earnings potential less volatile than some other manufacturers that focus solely on a single product line. Additionally, despite market downturns such as the COVID-19 pandemic over recent years which has led to dramatic declines among numerous companies in various industries, LCI Industries managed to recover strongly after this period.
Aside from its sound financial position which provides a sense of security for potential investors, another factor contributing to the increased interest in LCI Industries may be its dividend payout ratio (DPR) of 27.11%. This means that shareholders received a dividend payment worth $1.05 per share on March 24th if they were recorded as owners by March 10th – representing a yield of 3.78% on an annualized basis.
Despite this promising outlook it should be noted that LCI Industries are not unanimous favourites with industry experts or all investment analysts.They get a moderate buy rating from Bloomberg, with four out of eight analysts giving the stock a neutral rating and four recommending to buy shares. There is also a mixed range of price targets ranging from $95 to $130.
Regardless, LCI Industries appears to be an attractive investment opportunity for those seeking income-oriented stocks or are interested in diversifying their portfolio. Its experience in producing components for recreational vehicles and manufactured homes that can endure fluctuations in demand has helped it emerge as one of the most promising investments on NYSE today.
