Even though many businesses reported sizable gains and steady upward movement in the last financial quarter of 2011, it is still difficult these days to find stocks that display a winning combination of consistent dividend increases, high earnings per share and an acceptable payout ratio. In this article, I will explore five stocks which are positioned for positive growth in 2012. I have chosen to review these five stocks because they have hiked dividends in recent years, maintained a good payout ratio and have significant earnings per share. I believe this equates to a winning combination for investors, as evidenced below:
FMC Technologies, Inc. (FTI)
FMC Technologies is the leading international provider of innovative technology solutions for the energy industry. The business has nearly 14,000 employees working in 27 production facilities spread across 16 countries. FMC has shown remarkable growth in earnings per share and revenue over the last three quarters. It is currently in a very strong position with reasonable debt levels and favorable stock price performance.
Recently, the company announced the signing of an agreement with Anadarko Petroleum Corporation (APC) to provide subsea systems and LOF services for its Lucius project. This is expected to help the company widen its competitive moat and will attract favorable investor sentiment among investors. Even without the signing of this lucrative agreement, FMC Technologies has fared well recently. It started the current year with plans to increase its ownership of Schilling Robotics to 100%.
Currently, FMC Technologies has a market capitalization of nearly $13 billion with an average trading volume exceeding $2 million. The trading price of shares is recently around $52 with a 52-week range of $34 to $55. The company has maintained a good price to earnings ratio of above 32 with earnings per share of nearly $2. FMC has traditionally had a good dividend history. With a good dividend history, I believe that FMC Technologies has the capacity to capitalize on its strengths and outperform leading competitors in the industry. I would therefore rate this stock as a must buy in 2012.
Lockheed Martin (LMT)
It seems a bit paradoxical but every time there has been a conflict around the world, Lockheed Martin stock has recorded a significant decline. Lockheed Martin is one of the world's leading providers of sophisticated avionics technology and designs and manufactures some of the most sophisticated fighter planes and weapons delivery systems.
In the first two quarters of 2011, Lockheed Martin recorded substantial losses amidst tough competition from top competitors, The Boeing Company and Northrop Grumman. Loyal investors of Lockheed Martin were in the horns of dilemma whether to hold their stocks or sell them.
In October last year, the U.S. finally announced plans to withdraw its military forces from hostile regions such as Iraq and Afghanistan. Investors inferred the planned pullout as a bad omen expecting a marginal fall in America's military budget. However, Lockheed Martin was recently awarded a $66 million contract to support a U.S. Army research lab. The timing of this agreement was impeccable as it has allowed the technology giant to earn favorable investor sentiment in the stock market encouraging investors to hold their stocks and buy more.
Lockheed Martin also earns sizable revenue through international sale contracts and these have shown a remarkable increase in recent years. Expanding markets of Korea, China, Korea and India are a good prospect for expansion and are expected to open new frontiers for the business. Lockheed Martin currently has a massive market capitalization which easily exceeds $28 billion. On an average, the trading volume per day is around $2 million. After a promising first month of positive financial indicators and substantial growth, the company is trading at a share price of around $87 with a 52-week price range of $66 to $88. The price to earnings ratio is decent at nearly 11 with earnings per share easily exceeding $8.
Lockheed has traditionally enjoyed a good dividend history and this has attracted favorable investor sentiment. It currently has a dividend payout ratio of 1 and a yield of nearly 5%. Seeing how the prevailing market conditions are conducive of growth with Asian markets showing increasing potential, my analysis of financial data suggests that the business is poised toward growth in the current year.
Johnson & Johnson (JNJ)
Johnson & Johnson is the leading international brand in healthcare. It has a diverse portfolio of products with an increasing international market. Recently, Johnson & Johnson has broadened its product range to include Medical and Diagnostics Systems. With operations spread across half the globe Johnson & Johnson earns more than half of its revenue through its sales in international markets.
Johnson & Johnson has had a favorable run so far this year with leading financial indicators suggesting steady growth. Global operations have helped the multinational company maintain a massive market capitalization of nearly $178 billion. Johnson & Johnson has a healthy trading volume of $10 million with a price-to-earnings ratio of around 19 and earnings per share of $4. Trading value of shares currently stands at around $65 with a 52-week range of $57 to $68. Another positive factor that I believe should be considered here is the long list of loyal investors and positive investor sentiment that the company has traditionally enjoyed. Johnson & Johnson has a healthy dividend yield of about 4% with a dividend payout ratio of 0.5.
After the expiry of various patents, Johnson & Johnson is eyeing substantial growth in the pharmaceutical sector this year. With careful analysis of historical financial data and prevailing conducive market conditions, I believe Johnson & Johnson has the potential to push its growth levels.
Eli Lilly (LLY)
Eli Lilly is one of the leading pharmaceutical companies in the world. The pharmaceutical giant has recently had a good run as a result of increased sales of diabetes products in growing international markets.
In the last quarter of 2011, the company reported massive earnings of more than $858 million. This allowed the company to earn almost a dollar a share with revenues of nearly $6 billion. Compared to revenues worth $1 billion earned in the same quarter of 2010, the company has performed remarkably well in the previous year. In 2011, almost 20% of the company's income was realized through the sale of diabetes products.
Eli Lilly plans to introduce a new range of diabetic products in the market this year and this is expected to widen its competitive slate, leading to faster growth. The company recently released a comprehensive corporate responsibility report which I believe is going to boost the company's prospects of attracting favorable investor sentiment.
Currently, the company has a massive market capitalization of nearly $45 billion with an average trading volume of more than $8.5 million. Share price is currently afloat at around $38 although the last 52 weeks have recorded trading prices as low as $33 and as high as $42. Price to earnings ratio is currently a little below 10 and the business recently recorded earnings of nearly $4 a share. Eli Lilly is currently paying almost half a dollar per share in dividends and has a dividend yield of more than 5%. This has earned it favorable investor sentiment in the market. Seeing how the company has performed well last year and in the first month of the current fiscal quarter, I believe Eli Lilly has great potential for growth and it may even surprise investors by announcing a hike in dividends.
Halliburton is America's leading provider of oilfield services. It earns its revenues largely by helping other oil companies in their pursuits to explore and drill oil and gas wells.
The giant business has shown positive signs of upward movement in recent years and enjoys favorable investor sentiment in the market. As a result, investors have shown a lot of interest in the financial performance of this powerhouse. Halliburton has reported an increase of nearly 17% in overseas revenues since the third quarter of 2011. The business has global interests and this could lead to an expansion of operations with investment ventures in relatively newer markets. In the post global-crisis environment, I believe that the emerging markets of Asia and South America have huge potential for long-term future investment. China and Argentina are two economic powerhouses that are in the process of striking a deal with Halliburton.
Unless the global economy experiences another massive jolt, financial reports and current performance suggest that Halliburton will achieve its projected growth target of 22% for the current financial fiscal year. Halliburton has a massive market capitalization of more than $30 billion with total recorded revenues of $25 billion in 2011. At a current trading price of around $36, Halliburton has a price to earnings ratio of around 11 and earnings per share of almost $3. A positive dividend yield of nearly 1% has helped the company earn the trust of loyal investors. Seeing how the emerging markets of Asia and South America show a lot of promise for the business, I rank Halliburton among the safer stock investments for 2012.