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The Dow Chemical Company (DOW), E I Du Pont De Nemours And Co (DD), KBR, Inc. (KBR): Big, Low-Risk Profits From Natural Gas In An Unexpected Place

KBR, Inc. (NYSE:KBR) is currently trading at a P/E ratio of only 9.97 times projected earnings for 2014 but carries a 5-year projected earnings growth rate of 12% per year. While the dividend yield at present is only 1.01%, at a payout ratio of 25%, there is plenty of room for future increases in the dividend. The company carries almost no long-term debt with a debt to equity ratio of 0.03 providing investors with little reason for concern regarding the viability of the business. This is a business you can own and sleep very peacefully at night while their capital appreciates in step with the 12% earnings growth rate at KBR, Inc. (NYSE:KBR).

Fluor Corporation (NEW) (NYSE:FLR) currently has projects underway on 6 continents around the globe and is truly one of the giants in the commercial and industrial project services arena with its $10.08 billion market capitalization. Due to its already large scale, most would not be surprised to see it having lower projected growth rates for forward earnings; but you would be mistaken if you had that expectation. The current analysts’ consensus earnings growth estimates for Fluor Corporation (NEW) (NYSE:FLR) over the next 5 years currently sit at 12.7% per year and the P/E ratio based on 2014 earnings estimates is only slightly higher at 13.26. With an existing strong presence in the growing, resource driven economies of Australia, South America, and Southeast Asia, Fluor is superbly positioned to profit not only from cheap natural gas in the U.S. but from global growth and development as well. Investors in Fluor today should be able to place a great deal of confidence that the share price will grow at a pace at least equal to the future earnings growth rate over the next 5 years.

Final thoughts

E I Du Pont De Nemours And Co (NYSE:DD) appears to offer an excellent opportunity for double digit total returns on invested capital in the range of 10% to 12% per year over the long term for investors who act now. KBR, Inc. (NYSE:KBR) and Fluor are both poised to return 12%-14% per year but the gains will tend to be more heavily driven by capital gains and less direct dividend income than the gains from DuPont and will provide diversity across a broader range of industries. All three are compelling long term opportunities at this time.

The article Big, Low-Risk Profits From Natural Gas In An Unexpected Place originally appeared on Fool.com and is written by Ken McGaha.

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