The century old global company also sells industrial software and specialty chemicals and operates in six segments: Transportation, Power Systems & Electronics, Industrial Packaging, Food Equipment, Construction Products, and Polymers & Fluids. It has been restructuring from 800 divisions down to a planned 150 by selling off and merging divisions to run cleaner and meaner.
The company has a low corporate governance risk score of 3. The stock trades at a trailing 12.09 P/E and offers a 2.20% yield at a payout ratio of 26%. The stock is trading at 52 week high, up over 38% in the last year. Operating margin is 16.02% and return on equity stands at 24.40%. The company raised the dividend 6% last year and has been buying back shares.
This is a boring name that is slow-growing with only 7.45% five year EPS growth expected but analysts are slightly bullish with 11 Holds, 5 Strong Buys, 4 Buys, and 1 Underperform.
The company grows business through acquisitions, recently entering the Chinese hospitality industry buying Vesta for an undisclosed sum. Vesta makes restaurant equipment in China and its biggest clients are upscale hotels and chain eateries.
A favorite name is Walgreen Company (NYSE:WAG) which raised its yield for 37 years straight. It is the largest US drugstore chain with 8,077 stores. It trades at a trailing P/E of 20.32 with a 2.50% yield and a PEG of 1.08 despite its run of 51.50% this last year. The forward P/E is 13.12 and price/book is 2.26.
The turnaround story is compelling with Walgreen’s new chronic illness maintenance initiative, EV charging stations, and the flagship shopping experience. Walgreen Company (NYSE:WAG) has global ambitions with its strategic partnership with Alliance Boots to create a global health and wellness powerhouse. Just in March the two partnered with Amerisource Bergen, the pharmaceutical services company.
The company reinstated its share buyback of $2 billion worth of shares. Its lingering dispute with Express Scripts Holding Company (NASDAQ:ESRX) is in the rear view mirror and analysts see 12.98% EPS five year growth.
Going against the grain
It may feel unnatural to your investing style so start with a tiny position. With an industrial and a health retailer as Dividend Aristocrats to choose from you should be able to fit one in a go-go portfolio.
For value investors I like rue21, inc. (NASDAQ:RUE) on a pullback as you likely don’t have a teen retailer. Constant Contact Inc (NASDAQ:CTCT) is already off its highs if you think a small business tech could have some mojo.
Either way, switching it up a little couldn’t hurt your portfolio.
AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Illinois Tool Works. AnnaLisa 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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