Zacks_Analysts' Blog : Raven Partners with NovAtel - Analyst Blog

Raven Industries Inc. (RAVN) and NovAtel Inc. have entered into a partnership that aims to integrate NovAtel’s industry leading Global Navigation Satellite System (GNSS) positioning technology with Raven's comprehensive line of precision agriculture products. Such an alliance will not only drive new growth opportunities for both companies but  also benefit customers by driving efficiencies in their agricultural operations.

NovAtel Inc. is a leading original equipment manufacturer of precision GNSS components and subsystems, including receivers, antennas, enclosures and firmware. GNSS is an industry term used to describe all of the world’s satellite constellations, operating or planned.

GNSS currently incorporates USA’s GPS, Russia’s GLONASS, China’s Compass and the European Economic Union’s Galileo satellite systems. The ability to track all constellations is significant as more constellations are tracked, the better the reliability and availability of the positioning and navigation solutions, especially in partially obstructed environments.

Raven recently announced its 25^th annual dividend increase hiking its dividend by 12.5%. It reported strong fiscal 2010 results, delivering an EPS of $2.24, surpassing the Zacks Estimate of $2.18 and prior-year EPS of $1.58.

Raven’s revenue surged 32% substantially to $314.7 million, striding ahead of the Zacks Estimate of $305 million and year-earlier revenue of $237.8 million aided by increased sales of its innovative products catering to the energy exploration, precision agriculture and military surveillance markets.

Raven’s advantage is its presence in the energy exploration, precision agriculture and military surveillance markets. Raven with its ground -breaking ideas has helped define the concept of precision agriculture and continues to spearhead products that improve the position of growers around the world. From field computers to boom controls, from GPS guidance to steering systems, Raven is leading the way for precision agricultural technology. Further, the company expects accelerating farm income to augment 2011 sales.

The company is also riding on the back of strong demand for tethered aerostats and the contract with the U.S. government to produce T-11 Army Airborne parachutes. These would benefit the company’s Aerostar segment. The recent partnership with Jatco Inc. would further boost its return on investment. The company also possesses a debt-free balance. We currently have a Zacks #2 Rank (short-term Buy recommendation) on the stock.

South Dakota-based Raven Industries Inc. is an industrial manufacturer providing a variety of products for the agricultural, industrial, construction and military/aerospace markets. The company operates through four business segments: Engineered Films, Electronic Systems, Applied Technology and Aerostar. Graco Inc (GGG) and Spartech Corp. (SEH) are the two close competitors of Raven.