Your Next Smart Investment: Tetra Tech Inc. (TTEK)
Tetra Tech Inc. (TTEK) is on the rise, thanks to its commitment to providing premium consulting, design, and engineering services. Its appeal to shareholders is further enhanced by strong financial returns.
Based in Pasadena, Tetra Tech stands out as a top provider of consulting, construction management, engineering, program management, and technical services. The company offers innovative and cost-effective solutions to address essential needs in water management, environmental protection, and alternative energy services.
Let’s examine the key factors that position Tetra Tech as a wise investment choice right now.
Solid Business Structure
Tetra Tech is set to benefit from its diverse business model, which helps counterbalance any downturn in one sector with strength in others. The company’s emphasis on high-end consulting and engineering services continually boosts its competitive edge. For the fourth quarter of fiscal 2024 (ending September 2024), the company reported a 9% increase in revenues year over year, fueled by higher activity across U.S. Federal, U.S. State & Local, U.S. Commercial, and International sectors.
Strong Performance by Segments
The Government Services Group (GSG) segment is thriving due to heightened international development and advanced water treatment efforts, leading to a 12% increase in net sales year over year during the fourth quarter of fiscal 2024. Furthermore, robust performance in international projects is benefiting the Commercial / International Services Group, which experienced a 5% revenue increase year over year, aided by the successful RPS acquisition.
Tetra Tech currently holds a Zacks Rank #2 (Buy). Over the past year, the stock has appreciated by 20%, outperforming the industry‘s growth of 19.2%.
Image Source: Zacks Investment Research
Strategic Acquisitions
Tetra Tech is actively expanding its capabilities through strategic acquisitions. In May 2024, it acquired Convergence Controls & Engineering, enhancing its offerings in integrated automation solutions for the water and energy sectors. This firm is now a part of the GSG segment. Earlier, in February 2024, Tetra Tech added LS Technologies, further boosting its federal IT capabilities within GSG.
In January 2023, Tetra Tech completed the acquisition of RPS Group plc, a well-known consultancy in technology. This acquisition has strengthened its services in water, environment, and sustainable infrastructure in the UK while reinforcing its presence in renewable energy and environmental management.
Furthermore, in January 2023, Tetra Tech also acquired Amyx, Inc., based in Reston, VA. This firm specializes in enterprise technology services, cybersecurity, and management consulting. The Amyx acquisition has expanded Tetra Tech’s capacity for advanced data analytics and digital transformation services, especially for government and commercial clients within the GSG segment.
Tetra Tech continues to reward its shareholders with substantial returns. In fiscal 2024, the company distributed dividends totaling $58.8 million, reflecting a 12.9% increase from the previous year. The quarterly dividend rate was raised by 12% in July 2024, signaling strong financial health.
Other Stocks to Watch
Investors may also want to consider these top-rated companies:
Atmus Filtration Technologies Inc. (ATMU) currently holds a Zacks Rank of 2. The company has posted an average earnings surprise of 13.8% over the past four quarters, and Zacks’ consensus estimate for its 2024 earnings has risen by 4.7% in the last 60 days.
Applied Industrial Technologies (AIT) also holds a Zacks Rank of 2, with a trailing average earnings surprise of 5%. Consensus estimates for AIT’s 2024 earnings have increased by 0.7% over the past 60 days.
RBC Bearings Incorporated (RBC) carries a Zacks Rank of 2 as well, with an average earnings surprise of 2.5% in the last four quarters. Over the last 60 days, the consensus estimates for RBC’s fiscal 2025 earnings grew by 0.5%.
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These stocks were nominated by Zacks experts as their top picks that could increase by 100% or more in 2024. While success is not guaranteed, prior picks have seen returns soaring as high as +143.0%, +175.9%, +498.3%, and +673.0%.
Many of these selections are currently overlooked by Wall Street, presenting a unique opportunity to invest early.
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Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report
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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Atmus Filtration Technologies Inc. (ATMU) : Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and may not reflect those of Nasdaq, Inc.
