This article will be the Fifth in a series (see basic materials, consumer goods, healthcare) where I look for stocks I think will do well this upcoming year. In this article I am focusing on Industrial Goods stocks and to screen for them I will use the same criteria that I used in a previous article of mine for finding stocks in the financial sector. Because there was only one stock that matched my criteria and I wanted at least two, I had to slightly modify my criteria. The difference between the criteria I used to search for financial stocks and consumer goods was I lowered the dividend yield from 3% to 2%.
For my search I used the free stock screener from FinViz.com and used the following screener settings:
- I selected only stocks in the Conglomerates category.
- Companies with a market capitalization of $2 Billion or greater.
- A Price/Book ratio of less than 2.
- A PEG (Price/Earnings to Growth ratio) of less than 2.
- Positive Return on Assets.
- Positive Return on Equity.
- Positive EPS growth this year.
- Positive EPS growth quarter over quarter.
- Positive Sales growth this year.
- Positive Sales growth quarter over quarter.
- Long Term debt/Equity ratio of less than 1.
- Dividend Yield of greater than 2%.
Four companies met all of the above criteria, and they are listed below with a short business summary, PE ratio, and dividend yield from Yahoo Finance, and one- year performance from FinViz.com:
Progressive Waste Solutions Ltd. (BIN)
Progressive Waste Solutions Ltd. operates as a vertically integrated waste management company in North America. Progressive Waste Solutions has a PE of 20.33 and a dividend yield of 2.50%.
1 Year Performance: -13.76%
Republic Services, Inc. (RSG)
Republic Services, Inc. provides non-hazardous solid waste collection, transfer, and disposal services for commercial, industrial, municipal, and residential customers. Republic Service has a PE of 18.96 and a dividend yield of 3.20%.
1 Year Performance: -2.25%
Snap-on Inc. (SNA)
Snap-on Incorporated provides tools, equipment, diagnostics, repair information, and systems solutions for professional users. Snap-on has PE of 12.08 and a dividend yield of 2.60%.
1 Year Performance: -1.11%
Tyco International Ltd. (TYC)
Tyco International Ltd. provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products worldwide. Tyco has a PE of 13.43 and a dividend yield of 2.10%
1 Year Performance: +15.95%
Disclaimers: The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective. The information provided is not intended to be a complete analysis of every material fact respecting any strategy. The examples presented do not take into consideration commissions, tax implications or other transactions costs, which may significantly affect the economic consequences of a given strategy. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.