Rock-solid second-quarter results
Zep, Inc. (NYSE:ZEP) provides cleaning and maintenance chemicals and related products and services.
The company reported earnings of $0.12 per share show a growth of 9.1% compared to the second quarter one year ago. Revenues increased by 7.7% to $163.4 million and net income was $2.8 million, a 14.7% up. Retail sales grew, driven by automotive aftermarket products and by sales to new retailers.
Management is pleased with the results and announced that they will focus on the integration of Zep, Inc. (NYSE:ZEP) Vehicle Care. The company will utilize free cash flow to reduce debt as well.
The recent acquisition of Ecolab’s vehicle-care division for $120 million in cash is expanding the company’s presence among car, truck and fleet wash operators through Zep, Inc. (NYSE:ZEP)’s trademarks Niagara and Washtronics.
I believe the company will show good results in the future. Zep, Inc. (NYSE:ZEP)’s earnings have been positive for the past two years and I believe this trend should continue. Plus, its gross profit margin is very encouraging, currently it is at 47.4% after growing 260 basis points.
The Clorox Company (NYSE:CLX) has a proven strategy for long-term growth and its stock should be considered as such. Hence, I would buy Clorox shares and keep an eye on its debt level, goals and overall performance.
Despite Church & Dwight Co., Inc. (NYSE:CHD)’s huge efforts to remain competitive and gain market share, I find it hard to foresee a major overall growth driver for the firm. I would not stay long on the company.
Unless broad bear-market conditions prevail, I see more upside potential for Zep looking ahead. I would invest in this company.
Vanina Egea has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
The article Three Cleaning Champions for Your Portfolio originally appeared on Fool.com and is written by Vanina Egea.
Vanina 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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