5-Star Stocks Poised to Pop: Praxair

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, industrial gases supplier Praxair (NYSE: PX  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Praxair's business and see what CAPS investors are saying about the stock right now.

Praxair facts

Headquarters (Founded) Danbury, Conn. (1907)
Market Cap $28.7 billion
Industry Industrial gases
Trailing-12-Month Revenue $9.65 billion
Management

CEO Stephen Angel (since 2007)

CFO James Sawyer (since 2000)

Return on Equity (Average, Past 3 Years) 24.4%
Cash/Debt $48 million / $5.03 billion
Dividend Yield 1.9%
Competitors

Air Products & Chemicals (NYSE: APD  )

Airgas (NYSE: ARG  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 652 members who have rated Praxair believe the stock will outperform the S&P 500 going forward. These bulls include All-Star mrindependent, who is ranked in the top 2% of our community, and mookimd.

Earlier this month , mrindependent tapped Praxair as a solid income opportunity:

Stable stocks should look appealing given the uncertain economic future for developed economies. The current dividend yield of Praxair is about 2%. Current ROE is 24% and the stock is trading for 19 times expected earnings. The current payout ratio is 0.4 and the five year average payout ratio is 0.1.

As one of the world's leading providers of industrial gases, Praxair remains one of our community's top plays on ever-increasing emerging market industrialization. In fact, Praxair's three-year average return on equity (24.4%) tops that of main rivals Air Products (17.9%) and Airgas (15.1%), as well as more obvious emerging market stocks like Vale (NYSE: VALE  ) (22.7%), Mechel (NYSE: MTL  ) (20%), or PetroChina (NYSE: PTR  ) (15%).

And if that wasn't bullish enough, CAPS member mookimd lists several more reasons to look into the stock:

-Praxair serves over 25 different end markets in various regions, with over 50% of their revenues from sources outside the U.S.
-Gross margins holding at 40% over last 10 years
-Return on assets rising over 10 year period from
-Strong backlog and pricing power
-High barriers of entry due to the importance of uniformity and reliability
-Lowering overhead costs to (partially) offset economic slowdown
-Diversified customers (e.g. industrial gases used in energy, electronics, chemicals, metals, manufacturing, health care, aerospace and food & beverage) ...
-International exposure capable of driving strong growth in the future

What do you think about Praxair, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1344643, ~/Articles/ArticleHandler.aspx, 9/30/2014 11:58:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement