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Parker-Hannifin(PH - Get Report) is in the motion and control business. The company builds everything from fluid control systems to air conditioner parts to flight controls. By focusing its business around building subsystems, making the aircraft wheel rather than the whole aircraft or valves and fittings rather than the whole air conditioner, Parker enjoys a bigger moat with less competition.
PH bounced back from the recession relatively fast, in large part because its boring business provided a solid moat with that wasn't overly exposed to any single industry. Like many manufacturers, PH took the recession as an opportunity to cut costs and boost net margins, efforts that show up each quarter on Parker's income statement -- and increasing the earnings that get passed on to shareholders in the form of dividends.
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For a manufacturing firm, Parker employs relatively little leverage on its balance sheet. The firm's debt currently sits at well under two times cash, an indication that PH could materially cut its obligations or smooth dividend payouts with retained earnings if the economy hit a rough patch.
Currently, PH pays a 41 cent quarterly dividend per share, a 2% yield at current price levels. I'm expecting that dividend payout to get bigger in the coming quarter.