Why Ingersoll-Rand 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, diversified industrial company Ingersoll-Rand (NYSE: IR  ) has earned a coveted five-star ranking.

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

Ingersoll-Rand facts

 

 

Headquarters (founded)

Dublin, Ireland (1905)

Market Cap

$16.6 billion

Industry

Industrial machinery

Trailing-12-Month Revenue

$14.0 billion

Management

Chairman/CEO Michael Lamach

CFO Steven Shawley

Return on Equity (average, past 3 years)

10.3%

Cash / Debt

$832.9 million / $3.3 billion

Dividend Yield

1.5%

Competitors

Johnson Controls

Illinois Tool Works

United Technologies

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

On CAPS, 97% of the 998 members who have rated Ingersoll-Rand believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, civilrights, succinctly summed up the Ingersoll-Rand bull case for our community:

IR is a diversified industrial with a portfolio biased toward climate control (Trane Commercial and Trane Residential HVAC Systems). In addition, the portfolio contains the Thermo King transport refrigeration products company. The residential HVAC business will see explosive growth as the US housing market recovers. In addition, its huge installed based of HVAC systems will augment the bottom line with high margin aftermarket and service revenues. Trane commercial is a global leader and will benefit from renewed investments in commercial construction and the need for more energy efficient and green systems. Thermo King is the Cadillac of transport refrigeration systems. It historically has been the most profitable product line for IR and will benefit greatly from any recovery in Europe. TK is a reliable positive cash generator. Finally, IR has fairly good management but a truly outstanding CFO who has managed debt in a way that maximizes shareholder value. The company is a consistent performer and is undervalued. The stock should be $60 by year-end 2013.

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

With the U.S. relying on the rest of the world for such a large percentage of our goods, many investors are ready for the end of the "made in China" era. Well, it may be here. Read all about the biggest industry disrupters since the personal computer in 3 Stocks to Own for the New Industrial Revolution. Just click here to learn more.


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