nVent Hitting Its Growth Goals, And Margins Should Eventually Catch Up

At the time of its separation from Pentair (PNR), nVent Electric plc (NVT) had two key goals - accelerate its historically poor organic growth rate and drive margin leverage. This is still a very new story as an independent public entity, but so far so good - nVent has indeed being outgrowing its end-markets (and peers like Eaton (ETN)), and while the margin leverage isn’t there yet, there’s still a longer-term case for that.

I wasn’t all that impressed with the company’s valuation back in September and the shares have fallen about 6% since then, more or less keeping pace with industrials as a group and outperforming some of its peers like Eaton, Hubbell (HUBB), Schneider Electric (OTCPK:SBGSY), and Thermon Group (THR). The valuation is more interesting now, though, and although nVent doesn’t really look poised for huge short-term outperformance, it’s not a bad small/mid-cap industrial name to consider now.

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nVent Hitting Its Growth Goals, And Margins Should Eventually Catch Up