Rockwell Automation (NYSE:ROK) is the kind of company that makes others work better. With its XM Vibration Monitors, it aids industrial safety. With its PanelView Plus monitors, it enables companies to easily keep track of the variables that need to be dealt with. With its line of programmable logic controllers, Rockwell Automation (NYSE:ROK) aids in the automation of rote processes. In an increasingly automated world, this seems like a solid moat. Plus, those are only a small handful of the items Rockwell Automation (NYSE:ROK) manufactures.
Further, Rockwell has most of the other things I look for in a company. Dodging the consumer market and working with companies directly is a fairly solid play that tends to stabilize itself with contracts. Trading at around 17 times earnings, Rockwell is a slight discount from the S&P 500 price range. Plus, Rockwell Automation (NYSE:ROK) pays a 2.4% dividend. Overall, the company is pretty good. Pulling 11.6% profit margins, there’s wiggle room if something goes wrong.
On the whole, my only possible issue with Rockwell Automation (NYSE:ROK) is that it’s trading for 6 times its book value. That could simply be a reflection of the company’s bookkeeping practices, so it’s only a small irritation. I would recommend Rockwell, even more so than the other two companies in this list.
The Foolish bottom line
These electronics wholesalers actually are good deals. In some cases, trim profit margins have led to particularly attractive valuations. Even when they’re trading at a more average price range, they’re still pretty decent investments.
The article Wholesale Electronics at Wholesale Prices? originally appeared on Fool.com and is written by Chris Hodge.
Chris Hodge has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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