DIEBOLD INC. $32 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 62.6 million; Market cap: $2.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.5%; TSINetwork Rating: Average; www.diebold.com) makes ATMs, safes, vaults and building security systems.
Diebold spends 3% of its revenue on research. This has helped it develop innovative new products, such as its Opteva Flex Performance ATMs. These models can sort banknotes that customers deposit and then reissue them to other users. This reduces the need to refill these ATMs with fresh bills.
In the third quarter of 2011, Diebold’s revenue fell 5.2%, to $709.3 million from $748.6 million a year earlier. That’s mainly due to lower sales of lottery and voting equipment in Brazil.
Earnings fell 9.4%, to $41.8 million from $46.1 million. Earnings per share fell 5.8%, to $0.65 from $0.69, on fewer shares outstanding. These figures include several unusual items, such as costs to move most of its manufacturing operations to China and Hungary. However, these moves should lower Diebold’s annual costs by $100 million in three years, including $30 million in 2011.
Diebold probably earned $2.21 a share in 2011. The stock trades at 14.5 times that estimate. The shares also trade at 13.3 times Diebold’s projected 2012 earnings of $2.40 a share.
Diebold is a buy.
