S&P/ASX 200 Index (ASX: XJO) industrials stock NRW Holdings Ltd (ASX: NWH) has been on a tear since early April.
On 9 April, shares in the contract services provider closed at one-year lows of $2.31.
Yesterday, NRW shares finished the day changing hands for $4.14 apiece. That sees shares up 79.2% in less than five months.
Taking a step back, shares in the ASX 200 industrials stock are up 19.7% since this time last year. Though that's not including the 16.5 cents per share in fully franked dividends the company paid eligible shareholders over the full year.
At yesterday's closing price, NRW shares trade on a fully franked dividend yield (partly trailing, partly pending) of 4.0%.
The final dividend of 9.5 cents per share is still up for grabs. If you'd like to bank that passive income, you'll need to own the stock at market close on 17 September. NRW shares trade ex-dividend on 18 September. You can then expect to get paid on 8 October.
Now, here's why Macquarie Group Ltd (ASX: MQG) just boosted NRW Holdings to an outperform rating.
ASX 200 industrials stock makes key $200 million acquisition
On Tuesday, 2 September, NRW announced it had entered into a binding agreement to acquire Sydney-headquartered Fredon Industries for an enterprise value of up to $200 million.
Fredon provides multi service Electrical, Mechanical (HVAC), Infrastructure, Technology, and Maintenance services. According to the release, the company has a long track record of strong revenue growth and cash flow generation, "supported by a capital light operating model".
The ASX 200 industrials stock closed up 6.3% on the day as investors responded positively to the news.
Commenting on the acquisition, NRW CEO Jules Pemberton said, "Fredon represents a strategically and financially compelling acquisition for NRW, with the potential to drive further growth across the business and create long-term shareholder value."
Pemberton added:
Fredon is highly complementary to NRW's existing operations and, with its well-recognised brand and strong long term client relationships, provides an attractive platform to expand into adjacent disciplines…
With a combined workforce of around 11,500 people, broader geographic reach, and enhanced capabilities across Australia, New Zealand, Canada, and the United States, we are well positioned to deliver an expanded range of services and project solutions to clients in the infrastructure, resources, and commercial sectors.
Why Macquarie raised NRW to outperform
The team at Macquarie sounded a positive note on the ASX 200 industrial stock's acquisition.
According to the broker:
The acquisition of Fredon creates a strategic "4th Pillar" of operations, labelled "EMIT" (Electrical, Mechanical, Infrastructure, Technology), complementing the existing Civil, Mining, and MET (Mining Equipment Technology) segments.
Fredon opens up new addressable markets driven by energy transition, electrification, automation and digital innovation. Fredon's current pipeline comprises 52% mechanical, 38% electrical, 7% infrastructure, and 3% technology.
Macquarie noted that Fredon has $1 billion of work in hand (WIH), a $3.6 billion pipeline, and around $2 billion of submitted tenders. The broker said this provides "good visibility into the forecast ~$840m FY26 revenue and an expected step-up in FY27".
Connecting the dots, Macquarie raised its target price for the ASX 200 industrials share to $4.45 (up from $3.95).
That's 7.5% above Thursday's closing price. And it doesn't include those upcoming FY 2026 dividends.
