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With the 30-year treasury at 2.54%, the patient and diligent investor is presented with a fantastic opportunity to own high-quality American industrial titans at a good price and enjoy a dividend yield higher than the 30-year treasury yield. The following five industrial titans have strong records of returning capital to shareholders:

Criteria for Selection

1. Market cap greater than $10 billion.

2. Earnings per share growth rate greater than 10% per year.

3. Revenue growth rate greater than 5% per year.

4. Dividend growth rate greater than 5% per year.

5. Dividend payout ratio less than 50%.

Five Industrial Titans to Buy
Market CapTTM PEDiv YieldPayout Ratio10 Yr EPS Growth10 Yr Revenue Growth10 Yr Dividend GrowthYears Div Paid
ETN14.57B10.333.520.3620.728.211.925
UTX66.47B12.412.930.3811.117.6315.319
ITW25.57B13.462.690.3612.036.7112.948
APD16.89B14.463.20.4610.165.5811.130
MMM62.86B14.952.610.4612.796.316.254

Eaton Corp. (NYSE:ETN) is a global power management company. Eaton generated revenues of $16.1 billion and net income of $1.35 billion in 2011. With a net profit margin of 8.4%, a return on equity of 18%, and debt to equity of 55%, Eaton is a BUY.

United Technologies (NYSE:UTX) provides technology for the building and aerospace industries worldwide. United Technologies generated revenues of $58.2 billion and net income of $5.4 billion in 2011. With a net profit margin of 14%, a return on equity of 23%, and a debt to equity of 92%, United Technologies is a BUY.

Illinois Tool Works (NYSE:ITW) is a multinational manufacturer of industrial products and equipment. The company generated revenues of $17.8 billion and net income of $2 billion in 2011. With a net profit margin of 11.3%, a return on equity of 20.6%, and debt to equity of 48.7%, Illinois Tool Works is a BUY.

Air Products and Chemicals (NYSE:APD) supplies industrial gases and chemicals. The company generated revenues of $10.1 billion and net income of $1.25 billion in 2011. With a net profit margin of 12.4%, a return on equity of 21.4%, and a debt to equity of 64.7%, Air Products is a BUY.

3M (NYSE:MMM) is a global industrial conglomerate. 3M generated revenues of $29.6 billion and net income of $4.4 billion in 2011. With a net profit margin of 14.7%, a return on equity of 27.6%, and a debt to equity of 36.4%, 3M is a BUY.

Disclosure: I am long UTX, ETN.

Source: 5 Industrial Titans To Buy Instead Of Bonds