Fastenal Company (FAST) is a wholesale distributor of industrial, construction, and safety products that has ripped off an impressive run of growth and its outlook for 2022 remains strong despite global economic headwinds.

Fastenal boasts some other solid fundamentals that might make it attractive to investors ahead of its first quarter FY22 earnings release on Wednesday, April 13.

FAST Growth

Fastenal is a wholesale distributor of industrial, construction, and safety products that range from screws and electrical supplies to traffic cones and beyond. FAST offers various distribution and delivery methods that includes industrial-style vending machines and bin stock programs from its roughly 3,200 in-market locations.

Fastenal has also rolled out more technology and software-based solutions for its customers, as part of its efforts to improve efficiency at all turns. Plus, FAST’s product diversity means it’s able to have a wide range of customers.

Fastenal is less susceptible to the boom-and-bust cycles of the broader industrials and constructions sectors because it doesn’t sell big-ticket items. Instead, its smaller components are key cogs to countless companies and industries at all times.

Fastenal posted 12 straight years of revenue growth, including its most recent 6.4% climb in 2021 to help lift its earnings by 7.4%. Looking ahead, Zacks estimates call for FAST’s revenue to surge another 13% in 2022 and come in 7% higher in 2023 to hit $7.25 billion.

Meanwhile, its adjusted earnings are set to pop 12% in FY22 and 8% in FY23. Fastenal also claims a long history of quarterly EPS beats and its positive earnings revisions help it land a Zacks Rank #2 (Buy) right now.

Image Source: Zacks Investment Research

What Else

Fastenal boasts a strong balance sheet, with $2.9 billion in total current assets vs. $682 million in current liabilities. The company has also consistently raised its dividend, which includes an 11% boost to its 2022 quarterly payout. FAST’s dividend yields 2.1% at the moment to outpace the S&P 500’s 1.3% and Lowe’s 1.6% and match Caterpillar.

Fastenal is part of the Building Products – Retail industry that ranks in the top 8% of over 250 Zacks industries at the moment. This is something to pay attention to as buying stocks that are part of a strong industry has proven to be a key aspect of successful investing.

FAST shares have soared 136% in the last five years vs. its highly-ranked industry’s 106%. Fastenal stock fell alongside the market to start 2022, but it has surged since late February to trade 8% below its highs at around $59.50 per share at the end of regular trading Wednesday.

Bottom Line

Fastenal does trade at a premium compared to its industry at 32.4X forward 12-month earnings. But Wall Street has been willing to pay up for the stock for most of the last 10 years. And it trades 20% below its own recent highs and near its three-year median.

All told, Fastenal stock appears to be worth considering amid the current market volatility, as well as a longer-term play within a diversified portfolio.