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With less than one month to go before the tax-filing deadline, it's time to fund your Roth IRA. Here are two attractive stocks worth considering for your Roth contribution dollars. Both boast exciting growth prospects and competitive positions in their respective industries.
Snap-on (NYSE: SNA ) Primarily known for its Snap-on tools and focus on automotive repair, the Wisconsin-based company has broadened its focus to reach other industries, including aviation, agriculture, and mining. This has allowed Snap-on to diversify its revenue stream and fuel growth, which should drive earnings in the future. Beyond tools, Snap-on also sells diagnostic equipment and software, which are extremely profitable compared with Snap-on's other business segments. With an attractive margin profile and the potential for growth, this segment should help drive stronger sales and earnings growth. Snap-on is also expanding into emerging markets, specifically China and India. Only 10% of Snap-on's 2013 sales were derived from Asia, signifying a lot of growth potential.
Over the past three years, Snap-on's revenue has averaged annual growth of 5%, while earnings have averaged 22% growth. The company's recent P/E ratio has been just under 19, while the industry average P/E is close to 23. Snap-on's forward-looking P/E, based on next year's earnings, is less than 15. Snap-on's future growth prospects and enticing current valuation makes it a great candidate for your 2013 Roth IRA contribution dollars.
Stericycle (NASDAQ: SRCL ) Stericycle collects and treats regulated medical waste such as syringes and gloves. The company also provides training on medical-waste handling, manages patient communications, and offers a service to manage customer returns and recalls of pharmaceuticals or medical devices. The Illinois-based company has established itself as the market leader in medical-waste collection and disposal through its extensive collection network. The disposal of medical waste is heavily regulated. As such, hospitals and medical clinics continually outsource the handling of medical waste to experts. New regulations provide additional avenues of growth for Stericycle. The rising and aging U.S. population should also drive an increase in medical procedures and prescribed medications, which will increase the quantity of medical waste. Stericycle is well-positioned to benefit from this trend.
Over the past three years, Stericycle's revenue has averaged annual growth of 14% and earnings have also averaged 14%. The company's recent P/E ratio has been around 32, while the industry average P/E is about 46. Meanwhile, Stericycle's forward-looking P/E is 24. Be sure to consider Stericycle for your 2013 Roth IRA contribution.
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Consider these two attractive growth stocks for your Roth IRA today. You have until the April 15 tax-filing deadline to make your contribution for 2013. Before doing so, be sure to familiarize yourself with Roth IRA rules and eligibility requirements.
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