If you're like me, you wince a little each day the first time you click to see how the market's doing, not knowing whether it's found a reason to head north or to bore a hole directly to Antarctica. For that reason alone, I'm especially on the lookout for stocks that can give me growing earnings in an industry where global demand is strong. To me, that means stocks like underfollowed -- and maybe even a little dull, a la Peter Lynch -- Dresser-Rand (NYSE: DRC ) .
Dresser builds "rotating equipment" such as compressors, turbines, and gas expanders that find their way into the production, storage, and refining of oil, gas, and their petrochemical products across the globe. That may not knock your socks off, but Dresser-Rand just delivered an awfully strong quarter without the warnings about an impending slowdown that have become a fixture of this earnings season.
For the quarter, the company, which provides equipment to the likes of Petroleo Brasileiro (NYSE: PBR ) and BP (NYSE: BP ) , increased its operating income from $36.4 million to $82.8 million. Earnings per share jumped to $0.57, from $0.25 a year ago. Those doublings were joined by a 40% increase in revenues.
At the same time, CEO Vince Volpe wasn't guarded when looking forward to 2009. Instead, he observed that Dresser has surveyed its key clients and noted that the "present commodity prices and credit situation have not significantly affected the majority of planned [capital expenditure] budgets." His optimism is undoubtedly buoyed by Dresser having $1.2 billion of new orders in backlog that are scheduled to ship next year.
And the products turned out by the company aren't timeworn or mundane. For instance, as the past quarter closed, Dresser received an order to supply compression equipment for the world's first floating natural gas liquefaction plant, which will be put in service offshore Nigeria. From what I know of the global energy picture, I'll eagerly endorse Volpe's contention that "LNG liquefaction [will be] a strategic growth opportunity for the coming five to ten-year period."
For my money, there are a few energy companies that won't be knocked a little off course by the drop in commodities prices or the general -- albeit temporary, in my opinion -- flip-flopping of the global energy picture. I'd certainly count Schlumberger (NYSE: SLB ) and Halliburton (NYSE: HAL ) among those companies. But I'd also be silly to leave out one perhaps dull, but rapidly growing and steady Houston company with the ticker symbol "DRC."
Dresser-Rand is a tip-top five-star Motley Fool CAPS performer, but that's based on just 145 recommendations. Why not add your vote to this underappreciated mix?
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