Rockwell Automation (ROK) manufactures tools and controls used to increase efficiency at factories. Fittingly, the firm has been reducing its exposure to U.S. manufacturing in recent years, taking advantage of massive manufacturing expansion overseas to retool new factories in Europe and emerging markets. That widened geographic footprint should help to reduce economic swings in ROK's revenues.
Those swings should also be reduced thanks to changes in ROK's business. Because Rockwell's focus is on reducing costs for customers, it has an easier sale than other firms that are trying to tack less palpable products onto factory floors. If Rockwell can justify the cost savings of its automation equipment, it should get the same -- now that management has sold off the more cyclical power systems business, that consistency should be more apparent on its income statement.Rockwell has a long track record of returning free cash to shareholders; in the last few years, it's averaged sending around half of all the cash it generates back to its owners. With profits eclipsing pre-recession highs, that's good evidence for a hike to ROK's 43-cent quarterly payout. To see these dividend plays in action, check out the Industrial Dividend Hikes portfolio on Stockpickr. And if you haven't already done so, join Stockpickr today to create your own dividend portfolio. -- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV