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As business booms, RTX Corp.’s (formerly Raytheon Technologies) outlook remains strong.
Perimeter Solutions Inc. reported strong revenue and earnings as it benefits from its unique position in aerial retardants backed by a multi‑year government contract base.
T. Rowe Price Group trades cheaply despite offering a high 4.8% yield with a 40‑year dividend‑growth track record and net cash balance sheet.
Mattr Corp. (formerly ShawCor) offers upside thanks to end-market demand drivers as well as potential for further tuck-in acquisitions or internal expansion.
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ARCHER DANIELS MIDLAND CO. $36 (New York symbol ADM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 596.7 million; Market cap: $21.5 billion; Price-to-sales ratio: 0.3; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.adm.com) processes corn, wheat, soybeans, canola, flax seed, peanuts and other crops into a variety of food ingredients, such as flour, oils and sweeteners. It’s also the largest maker of ethanol from corn in the U.S. In the three months ended September 30, 2015, Archer’s earnings fell 66.3%, to $252 million from $747 million a year earlier. It spent $1.8 billion on share buybacks in the first nine months of 2015, so per-share profits declined 64.0%, to $0.41 from $1.14, on fewer shares outstanding. Without unusual items, mainly gains on asset sales, earnings per share fell 30.2%, to $0.60 from $0.86. Revenue declined 8.6%, to $16.6 billion from $18.1 billion. International markets supply half of the company’s revenue, so the high U.S. dollar hurts the contribution from its overseas operations. Record crop harvests have also depressed prices and profits at its grain-trading business....
These two automotive-equipment suppliers have shot up in the past year, partly because strong car sales should spur demand for their products for years to come. Both stocks seem expensive in relation to their earnings right now, but we still see Genuine Parts as a buy, as it has a wider variety of businesses than Snap-On (see next article). GENUINE PARTS CO. $91 (New York symbol GPC; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 150.8 million; Market cap: $13.7 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.7%; TSINetwork Rating: Average; www.genpt.com) gets about half of its sales and earnings by selling replacement auto parts. The company operates 1,100 outlets under the NAPA banner, and its distribution business serves 4,900 independent stores in North America, Australia and New Zealand....
SNAP-ON INC. $171 (New York symbol SNA; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 58.1 million; Market cap: $9.9 billion; Price-to-sales ratio: 2.7; Dividend yield: 1.4%; TSINetwork Rating: Average; www.snapon.com) makes tools for auto mechanics and sells them through a fleet of franchised vans that visit garages. It also makes specialized tools for industrial customers. Snap-On continues to expand beyond the U.S., which supplies 65% of its revenue. In August 2015, it paid $13.1 million for Ecotechnic, an Italian maker of equipment for maintaining vehicle air conditioning systems. The purchase should add roughly $13 million to Snap-On’s annual revenue. The company is also seeing strong demand for its tools and other products. In the three months ended October 3, 2015, its revenue gained 1.9%, to $821.5 million from $806.3 million a year earlier. Excluding exchange rates and acquisitions, sales gained 7.3%. Earnings per share rose 12.5%, to $1.98 from $1.76....
KEYSIGHT TECHNOLOGIES INC. $31 (New York symbol KEYS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.0 million; Market cap: $5.3 billion; Price-to-sales ratio: 1.8; No dividends paid; TSINetwork Rating: Average; www.keysight.com) reported a 2.6% revenue decline in its 2015 fiscal year, which ended October 31, 2015, to $2.86 billion from $2.93 billion in 2014. Excluding exchange rates, revenue rose 1%. Before unusual items, earnings fell 15.0%, to $432 million from $508 million. Due to more shares outstanding, per-share earnings fell 17.1%, to $2.52 from $3.04. That’s partly because Keysight raised its research spending by 7.2%, to $387 million (or 13.6% of revenue) from $361 million (or 12.3%). The company aims to shift away from manufacturing testing equipment for electronic devices to more profitable businesses like software and services. However, its short-term outlook is weak, which is why the stock trades at just 12.0 times the $2.59 a share Keysight will probably earn in fiscal 2016....