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Why Graco Is Poised to Outperform

By Brian D. Pacampara, CFA - Apr 18, 2013 at 9:34AM

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Market-trouncing returns could be written in this 4-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, fluid handling solutions specialist Graco (GGG -0.82%) has earned a respected four-star ranking.

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

Graco facts

Headquarters (founded)

Minneapolis, Minn. (1926)

Market Cap

$3.3 billion

Industry

Industrial machinery

Trailing-12-Month Revenue

$1.0 billion

Management

CEO Patrick McHale

CFO James Graner

Return on Equity (average, past 3 years)

43.4%

Cash/Debt

$457.9 million / $564.6 million

Dividend Yield

1.7%

Competitors

Colfax

IDEX

Nordson

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

On CAPS, 96% of the 342 members who have rated Graco believe the stock will outperform the S&P 500 going forward.

Earlier today, one of those Fools, All-Star Nittany95, succinctly summed up the bull case for our community:

For some reason I always keep coming back to Graco. That reason is quite simply management. They have managed to keep the balance sheet pristine through a horrific recession -- particularly in homebuilding where their sprayers and paint products find a home. ...

Now that we are seeing renewed demand and increases in aggregate economic activity, they should see an acceleration in growth and [free cash flow]. I am looking for annual dividend increases or a share buyback program that continues to expand over time.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.  

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Stocks Mentioned

Graco Inc. Stock Quote
Graco Inc.
GGG
$60.30 (-0.82%) $0.50
Colfax Corporation Stock Quote
Colfax Corporation
CFX
$63.63 (-0.48%) $0.31
IDEX Corporation Stock Quote
IDEX Corporation
IEX
$185.62 (-0.29%) $0.55
Nordson Corporation Stock Quote
Nordson Corporation
NDSN
$210.65 (-0.62%) $-1.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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