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|
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.