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Scientific instruments and research supplies are unfathomably expensive. Their high prices provide opportunities for fantastic profit margins. Many researchers say that you can estimate the price of an instrument or research supply item by guessing a reasonable consumer retail price and then “adding a zero” behind that number.

These high prices are not a consequence of high production costs. Consider the following example: disposable plastic weigh boats (for laboratory use) cost as much as 30 cents each yet the disposable plastic cups you use at a restaurant’s salsa bar are priced near 3 cents each. The salsa cups and the weigh boats are made of the same material and serve the same purpose (they carry materials and are disposable). Other, more complex scientific supplies also fetch a premium over their household counterparts. Clearly, scientific supply and electronics companies have an opportunity to make a killing.

These fantastic prices are likely to persist for years. (No one is calling for a research bubble, though many are calling for commodity bubbles, etc.) Therefore, the industry outlook is great for companies that supply electronics and supplies for specialty research and development. Consider the industry’s top dividend stocks, which have demonstrated long-term commitments to shareholder and income:

Electro-Sensors Inc. (NASDAQ:ELSE) recently traded at $4.18 per share. At this price level, the stock has a 3.8% dividend yield. For 10 out of the past 10 fiscal years, a share of ELSE paid a total of $1.48 in dividends. Of these dividend payments, a total of $0.80 was paid in the last five years.

ELSE shareholders have sustained a -2.8% change in share price over the past year. Shares of this nano-cap stock trade at a price-to-book ratio of 1.5, a price-to-earnings multiple of 27.9, and a price-to-sales multiple of 2.3 (trailing twelve months). Over the past decade shareholders enjoyed a 6.7% average annual return on equity.

Espey Manufacturing & Electronics Corp. (NYSEMKT:ESP) recently traded at $22.55 per share. At this price level, the stock has a 4.0% dividend yield. For 10 out of the past 10 fiscal years, a share of ESP paid a total of $6.73 in dividends. Of these dividend payments, a total of $5.51 was paid in the last five years.

ESP shareholders have seen a 2.5% change in share price over the past year. Shares of this micro-cap stock trade at a price-to-book ratio of 1.8, a price-to-earnings multiple of 12.3, and a price-to-sales multiple of 1.7 (trailing twelve months). Over the past decade shareholders enjoyed a 7.2% average annual return on equity.

Kewaunee Scientific Corp. (NASDAQ:KEQU) recently traded at $8.25 per share. At this price level, the stock has a 4.9% dividend yield. For 10 out of the past 10 fiscal years, a share of KEQU paid a total of $3.06 in dividends. Of these dividend payments, a total of $1.66 was paid in the last five years.

KEQU shareholders have suffered a -37.0% change in share price over the past year. Shares of this nano-cap stock trade at a price-to-book ratio of 0.7, a price-to-earnings multiple of 91.7, and a price-to-sales multiple of 0.2 (trailing twelve months). Over the past decade shareholders enjoyed a 6.3% average annual return on equity.

Landauer Inc. (NYSE:LDR) recently traded at $49.53 per share. At this price level, the stock has a 4.4% dividend yield. For 10 out of the past 10 fiscal years, a share of LDR paid a total of $17.55 in dividends.

LDR shareholders have endured a -14.0% change in share price over the past year. Shares of this small-cap stock trade at a price-to-book ratio of 5.7, a price-to-earnings multiple of 19.1, and a price-to-sales multiple of 3.9 (trailing twelve months). Over the past decade shareholders saw a 39.2% average annual return on equity.

MOCON Inc. (NASDAQ:MOCO) recently traded at $15.55 per share. At this price level, the stock has a 2.6% dividend yield. For 10 out of the past 10 fiscal years, a share of MOCO paid a total of $2.96 in dividends. Of these dividend payments, a total of $1.68 was paid in the last five years.

MOCO shareholders have seen a 23.6% change in share price over the past year. Shares of this micro-cap stock trade at a price-to-book ratio of 2.6, a price-to-earnings multiple of 15.6, and a price-to-sales multiple of 2.3 (trailing twelve months). Over the past decade shareholders enjoyed a 15.8% average annual return on equity.

Molex Inc. (NASDAQ:MOLX) recently traded at $22.88 per share. At this price level, the stock has a 3.5% dividend yield. For 10 out of the past 10 fiscal years, a share of MOLX paid a total of $3.35 in dividends. Of these dividend payments, a total of $2.67 was paid in the last five years.

MOLX shareholders have seen a 3.2% change in share price over the past year. Shares of this mid-cap stock trade at a price-to-book ratio of 1.7, a price-to-earnings multiple of 13.2, and a price-to-sales multiple of 1.1 (trailing twelve months). Over the past decade shareholders enjoyed a 5.5% average annual return on equity.

These dividend-paying companies may be able to capitalize on high profit margins from R&D spending. Consider them as additions to an income portfolio.


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

Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing. I repeat: this research does NOT constitute a guarantee.

Source: The 6 Best Science And Electronics Dividend Stocks