Parker-Hannifin: "Industrial" Isn't a Bad Word

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Sometimes you just gotta have a little fun with the tech folks. While they're all tying themselves into knots over Intel (Nasdaq: INTC), Apple (NYSE: AAPL), and Google (Nasdaq: GOOG), solid industrial companies like Parker-Hannifin (NYSE: PH) go largely unnoticed and unheralded.

Now, wait -- don't leave. What? You think just because I said the "I-word" that there's nothing here for you to see? Well, stick around and see whether I can convince you that not all industrial stocks are the same cyclical, low-return, lumbering behemoths.

Parker-Hannifin is largely in the business of motion control -- hydraulic and/or pneumatic systems that end up in all sorts of things like construction machinery, airplanes, and industrial assembly equipment -- and business is pretty good.

Looking at second-quarter results, we see sales grew about 13%, and roughly half of that was organic. Growth was pretty evenly strong in the industrial businesses and in climate/industrial controls, though aerospace sales growth came up in the mid-single digits. Margins were also solid (up at both the gross and operating line) as management continues to wring better profitability from the business.

Now, I know what you're gonna say -- it's a cyclical business, right? Well, I suppose. There have been lumps and bumps along the way, but this company has a pretty good overall record of growth. What's more, we're likely to be at least a few years from a peak, and the company is already producing results that annualize out to a return on invested capital in the double digits.

I realize that no 400-word column can do justice to a company that many readers may never have even heard of, so I strongly urge you to dig in for some due diligence of your own. Today's price on Parker-Hannifin may or may not make it right for you, but well-run industrials like Danaher (NYSE: DHR), Parker-Hannifin and United Technologies (NYSE: UTX) might be just the cure for investors suffering from tech-fatigue.

For more heavy-duty Foolishness:

• Applied Industrial's Growth Goal
• Danaher Does It All
• UTX Still Underappreciated

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).