4 Dividend Ideas In The Scientific Sector

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 |  Includes: BMI, ELSE, ESE, MOCO
by: Vatalyst

This article examines five companies that design or manufacture industrial monitoring or measuring devices. These five companies were chosen because they all pay dividends and deserve to be considered for your portfolio.

Electro-Sensors Inc. (NASDAQ:ELSE) ELSE has a market cap of $12.71 million with a price to earnings ratio of 25. The stock has traded in a 52 week range between $3.30 and $5.14. The stock is currently trading around $3.75. The company reported second quarter revenues of $1.6 million compared to revenues of $1.7 million in the second quarter of 2010. Second quarter net income was $118 thousand compared to net income of $146 thousand in the second quarter of 2010.

One of ELSE’s competitors is Danaher Corporation (NYSE:DHR). DHR is currently trading around $45 with a market cap of $30.22 billion and a price to earnings ratio of 13.75. DHR pays a dividend which yields 0. 20% versus ELSE whose dividend yields 4.2%.

ELSE manufactures instruments that monitor the production and operating rates of various machines. The company has been profitable in each of the last five years, but its earnings have been decreasing. Year-over-year second quarter revenues were down by 6% while net income was down by 23.7%. The company has been very good at paying dividends. It has paid quarterly dividends since 1996, and has paid its current $0.16 dividend since 2006. On October 19th, the company announced that it would be paying a $0.04 per share cash dividend to shareholders of record on November 4, 2011. While the company’s dividend is safe, investor’s capital could be at risk. The stock price has dropped by 14.58% over the last 52 weeks. I like this company’s dividend record, but would prefer to invest in a company that provides growing earnings and a more stable stock price. I rate ELSE as a hold.

Mocon Inc. (NASDAQ:MOCO) MOCO has a market cap of $77.49 million with a price to earnings ratio of 15.26. The stock has traded in a 52 week range between $11.85 and $17.67. The stock is currently trading around $15. The company reported second quarter revenues of $9.08 million compared to revenues of $7.35 million in the second quarter of 2010. Second quarter net income was $1.22 million compared to net income of $1.09 million in the second quarter of 2010.

One of MOCO’s competitors is PerkinsElmer Inc. (NYSE:PKI). PKI is currently trading around $18.78 with a market cap of $21.2 billion and a price to earnings ratio of 6.17. PKI pays a dividend which yield s 1.5% versus MOCO whose dividend yields 2.7%.

MOCO manufactures electronic measurement and monitoring equipment for use in laboratories and research facilities. The company has been profitable in each of the last ten years, and in 2010 increased its net income by 55% to $4.5 million from $2.9 million in 2009. The company increased its year-over-year second quarter revenues by 23% and net income by 11%. The company has paid quarterly dividends since 1986 and since 2006 has increased its dividend six times by 33%. The current dividend is $0.40 with a 2.7% dividend. On August 26st MOCO announced that it would be paying a $.10 per share dividend to shareholders of record on November 14th. In addition to the company’s strong record of increasing earnings and dividends, the stock price is up by 10.27% over the last 52 weeks. I think investors will continue to find MOCO attractive. I rate MOCO as a buy.

Badger Meter Inc. (NYSE:BMI) BMI has a market cap of $422.83 million with a price to earnings ratio of 15.90. The stock is trading in a 52 week range between $27.37 and $45.49. The stock is currently trading around $28. The company reported second quarter revenues of $69.7 million, compared to revenues of $75.7 million in the second quarter of 2010. Second quarter net income was $6.8 million compared to net income of $ 9 million in the second quarter of 2010.

One of BMI’s competitors is Itron Inc. (NASDAQ:ITRI). ITRI is currently trading around $31 with a market cap of $1.26 billion and a price to earnings ratio of 10.96. ITRI does not pay a dividend versus BMI whose dividend yield is 2.2%.

BMI manufactures liquid flow meters and measurement devices. The company has had recent earnings decreases and saw a 19% decrease in its 2010 net income. Its year-over-year third quarter report revenues decreased by 8.6% while its net income decreased by 31%. The company has paid quarterly dividends since 1992 and since 2006 it has increased its dividend five times by 133%. On October 19th, the share price of BMI dropped by 11.8% when the company missed revenue and earnings projections. The company cited reductions in spending by its government and municipal water distribution customers as the reason. The stock price is down by 32.5% over the last 52 weeks, and I do not see any catalyst that will turn this company around. I rate BMI as a sell.

ESCO Technologies (NYSE:ESE) ESE has a market cap of $746.55 million with a price to earnings ratio of 12.37. The stock has traded in a 52 week range between $23.75 and $43.15. The stock is currently trading around $28. The company reported third quarter revenues for the period ending on June 30th, in the amount of $176.3 million, compared to revenues of $157 million in the third quarter of 2010. Third quarter net income was $13 million compared to net income of $14.5 million in the third quarter of 2010.

One of ESE competitors is Pall Corporation (NYSE:PLL) PLL is currently trading around $47 with a market cap of $5.46 billion and a price to earnings ratio of 17.79. PLL pays a dividend that yields 1.4% versus ESE whose dividend yields 1.1%.

ESE engineers and markets products for companies in the Utilities and Aerospace industries. The company’s earnings not have not been inspiring, and third quarter net income was down by 11.5%. The stock price has dropped by 30.9% over the last three months. However the company has a history of beating analyst earnings predictions and will soon release its fourth quarter and annual earnings results. It will be interesting to see if the next earnings report can slow down the decline in the stock price. ESE record of paying dividends does not help the stock price as it is spotty and the dividend is only $0.32 with a 1.1% yield. I would not consider purchasing this stock until after the fourth quarter earnings report. I rate ESE as a hold.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.