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5-Star Stocks Poised to Pop: ABB

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Swiss electrical-engineering giant ABB (NYSE: ABB  ) has earned a coveted five-star ranking.

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

ABB facts

Headquarters (founded)

Zurich (1883)

Market Cap

$43.7 billion

Industry

Heavy electrical equipment

Trailing-12-Month Revenue

$35.16 billion

Management

CEO Joseph Hogan (since 2008)

CFO Michel Demare (since 2005)

Return on Equity (average, past 3 years)

20.4%

Cash/Debt

$4.92 billion / $3.66 billion

Dividend Yield

3.4%

Competitors

General Electric (NYSE: GE  )

Siemens (NYSE: SI  )

Honeywell International (NYSE: HON  )

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

On CAPS, 98% of the 1,776 members who have rated ABB believe the stock will outperform the S&P 500 going forward. These bulls include All-Star GundersonGroup, who is ranked in the top 10% of our community, and sikiliza.

Just last month, GundersonGroup tapped ABB as a powerful bargain pick: "14 PE on an energy efficiency powerhouse with a global presence? Energy efficiency is one of the few remaining profit centers that have remained relatively untapped."

ABB even boasts a solid three-year average operating margin of 13%. That's higher than that of other industrial giants such as General Electric (10%), Siemens (8%), and Honeywell (10%).

CAPS member sikiliza expands on the ABB outperform argument:

Well run company with global operations and an experienced managed team. Think GE without GE capital and need for political expediency and you are thinking ABB. The lower institutional holdings also make it a great "fly below the radar" stock with excellent medium to long term returns.

What do you think about ABB, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track ABB? Add it to your watchlist.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of ABB. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 29, 2011, at 11:01 PM, epeon wrote:

    I used to work for ABB and, frankly, I was never impressed by the management. Their organic growth is nil. They grow by acquisition. But, those acquisitions are expensive and they don't seem to do a good job of merging them.

    You can see this in a lot of ways. They bought an almost $2 billion automation company when they bought ElsagBailey. They merged it with their own automation company. And, now, the automation division is still $2 billion ten years latter. My point is that they don't do organic growth and that points out how bad their management really is. I am not a fan and I would not own the stock.

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5/25/2012 4:00 PM
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