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%.
| Market Cap | TTM PE | Div Yield | Payout Ratio | 10 Yr EPS Growth | 10 Yr Revenue Growth | 10 Yr Dividend Growth | Years Div Paid | |
| ETN | 14.57B | 10.33 | 3.52 | 0.36 | 20.72 | 8.2 | 11.9 | 25 |
| UTX | 66.47B | 12.41 | 2.93 | 0.38 | 11.11 | 7.63 | 15.3 | 19 |
| ITW | 25.57B | 13.46 | 2.69 | 0.36 | 12.03 | 6.71 | 12.9 | 48 |
| APD | 16.89B | 14.46 | 3.2 | 0.46 | 10.16 | 5.58 | 11.1 | 30 |
| MMM | 62.86B | 14.95 | 2.61 | 0.46 | 12.79 | 6.31 | 6.2 | 54 |
Eaton Corp. (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 (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 (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 (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 (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.
