The most recent quarter for RBC Bearings Incorporated (NASDAQ:ROLL) too showed a sales decline. Its net revenue for fiscal 2013 fourth quarter slipped year over year by 7.5% to $103.0 million from $111.3 million. This decline was attributed to an 18.9% drop in industrial sales which was weakened by slow OEM activity in mining, semiconductor and military vehicles. Strength, however, was provided by defense and aerospace sales which rose 4.9%.
A beat and a miss
RBC Bearings Incorporated (NASDAQ:ROLL) realized an adjusted EPS of $0.69 in the fiscal 2013 fourth quarter and $2.43 for the full year, beating analysts’ estimate of $0.63 and $2.38, respectively. Gains in efficiency and margin expansion facilitated the earnings beat.
A solid 16% operating profit margin delivered by its aerospace segment was likewise the bright point in the 2013 first quarter results of Kaman Corporation (NYSE:KAMN). This segment’s rich program mix accounted for this performance, which was better-than-expected, the company said. Net sales for the quarter rose year over year to $388.1 million from $383.7 million. Its net income of $7.2 million or $0.26 per share was down from last year’s $9.4 million or $0.36 per share and missed analysts forecast of $0.32 per share on revenues of $396.61 million.
Who’s top in dividends?
| Kaman | Kaydon | RBC | |
|---|---|---|---|
| Market Cap | $955.62 million | $906.29 million | $1.22 billion |
| Forward P/E (1 yr) | 12.89 | 14.84 | 17.24 |
| Long-term growth rate (5 yrs) | 15% | 10% | 14.4% |
| Dividend yield (annual) | 1.90% | 2.9% | N/A |
Taking the above metrics into account, Kaydon Corporation (NYSE:KDN) should be an attractive pick for the buy-and-hold investors. Its 2.9% annual dividend yield is tops in the machine tools and accessories industry and its forecast 5-year growth ranks among the top 10. As seen in its most recent quarter, the company’s recent acquisitions are starting to deliver. Notably, Kaydon shares have a consensus one-year target price of $31 and a break-out appears to have developed with a new 52-week high at the $28 level set this July.
Foolish take: bearings bear watching
Investors may also be wiser to include Kaman Corporation (NYSE:KAMN) and RBC Bearings Incorporated (NASDAQ:ROLL) in their watch list. Along with Kaydon, their products are vital to various industry applications and are unlikely to fade into obsolescence anytime soon. A run-up in the duo’s fortunes remains distinctly possible as the world economic recovery gains more traction.
Arturo Cuevas has no position in any stocks mentioned. The Motley Fool owns shares of RBC Bearings. Arturo is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Will Profits Roll from Investing in Bearings? originally appeared on Fool.com is written by Arturo Cuevas.
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