GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

The Best Industrial Dividend Stocks 2012

The U.S. economy has a strong industrial sector. The sector has 350 stocks and a total market capitalization of USD58.64 trillion. It is still cheap with a P/E ratio of 12.67 and a dividend yield of 2.27 percent. The best yielding stocks from the sector are from the waste management and manufacturing housing industry.

I screened the industrial sector by stocks with an operating margin and return on investment over 15 percent. In addition, the company should have a positive dividend yield. Ten companies fulfilled these criteria of which six are recommended to buy or to strong buy.

Here are my favorite stocks:

1. Graco (GGG)
has a market capitalization of $3.12 billion. The company employs 2,300 people, generates revenues of $895.28 million and has a net income of $142.33 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $251.01 million. Because of these figures, the EBITDA margin is 28.04 percent (operating margin 24.52 percent and the net profit margin finally 15.90 percent).

The total debt representing 35.30 percent of the company’s assets and the total debt in relation to the equity amounts to 95.64 percent. Due to the financial situation, a return on equity of 48.51 percent was realized. Twelve trailing months earnings per share reached a value of $2.32. Last fiscal year, the company paid $0.86 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 22.47, P/S ratio 3.49 and P/B ratio 9.66. Dividend Yield: 1.72 percent. The beta ratio is 1.60.

2. Fastenal Company (FAST) has a market capitalization of $15.52 billion. The company employs 15,168 people, generates revenues of $2,766.86 million and has a net income of $357.93 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $619.32 million. Because of these figures, the EBITDA margin is 22.38 percent (operating margin 20.77 percent and the net profit margin finally 12.94 percent).

The company has no long-term debt. Due to the financial situation, a return on equity of 26.11 percent was realized. Twelve trailing months earnings per share reached a value of $1.21. Last fiscal year, the company paid $0.65 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 43.44, P/S ratio 5.69 and P/B ratio 10.78. Dividend Yield: 1.28 percent. The beta ratio is 0.99.

3. Kennametal (KMT) has a market capitalization of $3.79 billion. The company employs 12,000 people, generates revenues of $2,403.49 million and has a net income of $232.28 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $415.14 million. Because of these figures, the EBITDA margin is 17.27 percent (operating margin 15.26 percent and the net profit margin finally 9.66 percent).

The total debt representing 11.36 percent of the company’s assets and the total debt in relation to the equity amounts to 19.10 percent. Due to the financial situation, a return on equity of 15.56 percent was realized. Twelve trailing months earnings per share reached a value of $3.61. Last fiscal year, the company paid $0.48 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 13.17, P/S ratio 1.54 and P/B ratio 2.30. Dividend Yield: 1.21 percent. The beta ratio is 1.65.

Take a closer look at the full table of the most profitable industrial goods stocks. The average price to earnings ratio (P/E ratio) amounts to 18.89 and forward P/E ratio is 15.10. The dividend yield has a value of 1.24 percent. Price to book ratio is 5.70 and price to sales ratio 2.63. The operating margin amounts to 20.01 percent. Finally, the return on equity has a fantastic margin of 32.62 percent and the return on investment follows with a value of 20.53 percent.

Related stock ticker symbols:

ROK, GGG, COL, FAST, LFUS, SNHY, KMT, NDSN, JOY, GDI

Selected Articles:

· 9 Fastest Growing Industrial Stocks With Best Yields

· Dogs of the Dow Jones Industrial Average As Of January 2012

· 15 Industrial Dividend Stocks With Buy Or Better Rating

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

Visit Dividend's Website


Rating: 3.2/5 (6 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide