WAJAX CORP. $47.35 - Toronto symbol WJX

We first recommended WAJAX CORP. $47.35 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.6 million; Market cap: $786.0 million; Dividend yield: 6.8%) in the May 2012 Stock Pickers Digest.

We thought the company had considerable hidden value. It’s not a household name, but its 117 dealerships across Canada sell to a range of customers in growing markets like mining, oil sands, pipelines and public infrastructure.

Wajax also trades at a low price-to-earnings ratio of 11.5, based on this year’s forecast profits, and its recent 35% dividend increase gives it a high 6.8% yield.

Now the company has been added to the S&P/TSX Composite Index.

That will prompt index mutual funds and exchange-traded funds (ETFs) to add the stock to their portfolios.

As well, its inclusion in the S&P/TSX index will make it more attractive to conservative, safetyconscious investors looking for high income. That demand should be a plus for the shares.

Wajax is a buy.

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