4-Star Stocks Poised to Pop: Eaton

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Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, industrial parts provider Eaton (NYSE: ETN) has earned a respected four-star ranking.

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

Eaton facts 

Headquarters (founded)	Cleveland (1916)
Market Cap	$7.5 billion
Industry	Industrial Machinery
TTM Revenue	$14.7 billion
Management	Chairman/CEO Alexander Cutler (since 2000) CFO Richard Fearon (since 2002)
Return on Equity (average, last three years)	18.4%
Dividend Yield	4.5%
Competitors	Emerson Electric (NYSE: EMR) General Electric (NYSE: GE)
CAPS members bullish on ETN also bullish on	Johnson & Johnson (NYSE: JNJ) Apple (Nasdaq: AAPL)
CAPS members bearish on ETN also bearish on	Caterpillar (NYSE: CAT) Chesapeake Energy (NYSE: CHK)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 717 of the 735 members who have rated Eaton -- some 98% -- believe the stock will outperform the S&P 500 going forward. These bulls include mtinvest and bubbasuth.

Two months ago, mtinvest followed the lead of two leaders and looked into the stock:

Buffett and Obama like Eaton. Currently their electrical business unit is generating almost half of their revenue. But their automotive and truck business units could grow very fast in the future. Their plug-in hybrid electric utility truck will be very interesting to follow in the future.

In a pitch from one week later, bubbasuth elaborates on the electric opportunity:

A primary focus for all power electronics (i.e. motors used in fluid, motion, HVAC, etc.) is efficiency. Eaton has an ongoing positive presence in this field and will see expansion of demand under the Obama administration.

Vertical integration allows for higher margin operations, as well, and Eaton has a high profile in these complex systems. Again, for high efficiency systems, the market will tend to grow and ASPs will remain high because the alternative is low efficiency 'commodity' suppliers leveraging off of Chinese manufacturing.

What do you think about Eaton, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.