Why Polaris Is Poised to Keep Zooming

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, all-terrain vehicle maker Polaris Industries (NYSE: PII  ) has earned a respected four-star ranking.

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

Polaris facts

Headquarters (founded)

Medina, Minn. (1987)

Market Cap

$6.6 billion

Industry

Leisure products

Trailing-12-Month Revenue

$3.3 billion

Management

Chairman/CEO Scott Wine

President/COO Bennett Morgan

Return on Equity (average, past 3 years)

53.5%

Cash/Debt

$380.8 million / $106.4 million

Dividend Yield

1.8%

Competitors

Arctic Cat

Honda Motor

Kawasaki Heavy Industries

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

On CAPS, 90% of the 349 members who have rated Polaris believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those bulls, TMFInnovator, explained why the stock still has plenty of room to run:

Polaris is a constant reminder to me on why I should never 'anchor' on a stock's current price. PII has had a seat on my watchlist since Aug '11, when it traded at $50. Since then, the company has executed almost perfectly and the stock price rose accordingly, hitting many new 52-week highs over the next two years.

I don't think they're done yet.

-Even at $95, PII is trading at a respectable 18 times earnings.
-There are still plenty of drivers. The US DoD awarded a $382 million contract for Polaris 'fire and emergency vehicles' through 2018. Consumer spending also continues to recover, and additional discretionary income is good for recreational vehicle sales.
-The dividend has increased 121% in four years and is still just 37% of LTM's free cash flow.   

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Polaris 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.


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