Why Graco Is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, fluid handling solutions specialist Graco (NYSE: GGG  ) has earned a respected four-star ranking.

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

Graco facts

Headquarters (founded)

Minneapolis, Minn. (1926)

Market Cap

$3.3 billion

Industry

Industrial machinery

Trailing-12-Month Revenue

$1.0 billion

Management

CEO Patrick McHale

CFO James Graner

Return on Equity (average, past 3 years)

43.4%

Cash/Debt

$457.9 million / $564.6 million

Dividend Yield

1.7%

Competitors

Colfax

IDEX

Nordson

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 342 members who have rated Graco believe the stock will outperform the S&P 500 going forward.

Earlier today, one of those Fools, All-Star Nittany95, succinctly summed up the bull case for our community:

For some reason I always keep coming back to Graco. That reason is quite simply management. They have managed to keep the balance sheet pristine through a horrific recession -- particularly in homebuilding where their sprayers and paint products find a home. ...

Now that we are seeing renewed demand and increases in aggregate economic activity, they should see an acceleration in growth and [free cash flow]. I am looking for annual dividend increases or a share buyback program that continues to expand over time.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Graco may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.  


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