Why Dover Stock is Worth a Closer Look as a Growth Play

Dover Corporation stock has doubled in the last 12 months

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Dover Corporation (NYSE:DOV) is a global industrial products manufacturer. SWEP, a subsidiary of Dover, announced the signing of a multiyear contract with Kvitebjørn Varme AS, to supply Energy Transfer Stations and advance the expansion of district heating from Tromsø, Norway based energy supplier on March 18. According to Dover, the goal is for 96% of all district heating in Tromsø to be produced by renewable energy sources by 2023, with the remaining 4% being generated by electricity.

On the charts, Dover Corporation stock has more than doubled in the last 12 months. The shares scored a record high of $138.19 back on March 18, and offers a $1.98 forward dividend and a dividend yield of 1.46%. Despite the stock's outperformance year-over-year, six of nine analysts maintain tepid "hold" ratings, so a round of upgrades could come through and keep the wind at the security's back.

From a fundamental point of view, there is a substantial amount of risk associated with buying into Dover stock. Although the company’s sector offers plenty of growth potential with its involvement in renewable energy, Dover’s specific fundamentals seem to lack stability and consistency. Dover's balance sheet has $3.3 billion in total debt, heavily outweighing its $513 million in cash. Its revenues have oscillated from growth to declines on an annual basis since at least fiscal 2017. Most recently, DOV revenues fell about $450 million or 6.4% in fiscal 2020.

At the bottom-line, Dover added about $6 million in net profits, bringing its total net income up to $683 million for fiscal 2020.  Dover stock also has an attractive forward price-earnings ratio of 19.12, despite currently trading at a somewhat high price-earnings ratio of 29.03. Overall, Dover stock is intriguing from a risk-reward perspective. Investors may want to keep an eye on Dover as a speculative play. Dover stock could see considerable growth once it begins showing a bit more consistency from a fundamental angle.


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