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Snap-On(SNA - Get Report) is having a stellar year in 2012. Since the first trading day of January, the $4.2 billion tool maker has rallied more than 44%. Snap-On isn't your typical tool company. The firm sells its tools and diagnostic equipment primarily to professionals who work on cars, trucks, planes, or other machines.
Independent car techs are the biggest buyer of Snap-On products, served by a fleet of 3,200 vans that sell and deliver tools directly to potential client shops. That control of the product from manufacture to delivery gives SNA precision control over its costs that outsourcing rivals don't have. By focusing on its professional lines, SNA has built an enviable brand that trickles down to consumers. DIY customers want to use the same tools that the pros use, and effective marketing (like sponsoring a NASCAR team) has helped the firm keep its brand attractive and its pricing power intact.
Snap-On currently pays out a 34-cent quarterly dividend, which gives investors a 1.9% yield. Financially, I think SNA looks likely to boost its payouts in 2012.
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-- Written by Jonas Elmerraji in Baltimore.