Chart currently trades at $197 and has been a dream stock for shareholders. It’s returned 257% since November 2019, nearly tripling the S&P 500’s 90.5% gain. The company has also beaten the index over the past six months as its stock price is up 26.9%.

Following the strength, is GTLS a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.

Why Are We Positive On Chart?

Installing the first bulk Co2 tank for McDonalds’s sodas, Chart (NYSE:GTLS) provides equipment to store and transport gasses.

1. Skyrocketing Backlog Locks In Future Sales

In addition to reported revenue, backlog is a useful data point for analyzing Gas and Liquid Handling companies. This metric shows the value of outstanding orders that have not yet been executed or delivered, giving visibility into Chart’s future revenue streams.

Chart’s backlog punched in at $4.54 billion in the latest quarter, and over the last two years, its year-on-year growth averaged 70.5%. This performance was fantastic and shows the company has a robust sales pipeline because it is accumulating more orders than it can fulfill. Its growth also suggests that customers are committing to Chart for the long term, enhancing the business’s predictability.

2. Operating Margin Rising, Profits Up

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses–everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Looking at the trend in its profitability, Chart’s operating margin rose by 8.1 percentage points over the last five years, as its sales growth gave it immense operating leverage. Its operating margin for the trailing 12 months was 15.1%.

3. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Chart’s EPS grew at an astounding 26.3% compounded annual growth rate over the last five years. This performance was better than most industrials businesses.

Final Judgment

These are just a few reasons why we think Chart is a great business, and with its shares topping the market in recent months, the stock trades at 15.8x forward price-to-earnings (or $197 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More Than Chart

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