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Topic: Growth Stocks

AGILENT TECHNOLOGIES INC. $57 – New York symbol A

AGILENT TECHNOLOGIES INC. $57 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 333.0 million; Market cap: $19.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 0.9%; TSINetwork Rating: Average; www.agilent.com) was a unit of Hewlett- Packard until 1999, when Hewlett spun it off as a separate firm. Agilent now plans to break itself into two publicly traded companies in November 2014.

One firm will keep the Agilent name and focus on testing equipment for medical-research labs. This business supplies 60% of Agilent’s revenue and will pay a dividend comparable to the current 0.9% yield.

The second company, called Keysight Technologies, will make testing systems for improving electronics, such as cellphones and computer equipment. Keysight will not pay a dividend, at least initially.

Meanwhile, Agilent earned $244 million in its 2014 second quarter, which ended April 30, 2014. That’s down 9.3% from $269 million a year earlier. Pershare earnings fell 6.5%, to $0.72 from $0.77, on fewer shares outstanding outstanding. Revenue was unchanged at $1.7 billion. Agilent spends 10% of its revenue on research.

The stock is up 17% since Agilent announced the spinoff in September 2013. Even so, it trades at a still-attractive 18.5 times the company’s projected 2014 earnings of $3.08 a share. The $0.53 dividend yields 0.9%.

Agilent is a buy.

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