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Ingersoll-Rand(IR - Get Report) is in the same boat. Like Watsco, the firm is in the air conditioning business; not to mention the security system business and the golf cart business. That motley crew of industrial products gives Ingersoll-Rand a sales stream that's highly dependent on the state of the economy -- tight capital means harder sales for the firm's big-ticket items.
While the company's diversification is enviable, the effect on its income statement is probably negligible. After all, its products are still all industrial offerings.
That said, brand recognition is a key part of Ingersoll-Rand's strategy. With names such as Trane, Club Car, and Schlage, the firm's products have good reputations and tend to be league leaders in their respective industries -- a factor that somewhat offsets the firm's dependence on demand for industrial goods.
The company's 33% dividend hike during the last week of December should help placate investors in the meantime.
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-- Written by Jonas Elmerraji in Baltimore.