Below the Radar: Lexmark Takes Aim Again at the Low-End Printer Market

In a market as volatile as this one, many fund managers are looking for solid earnings growth, and they're finding it in some of the most mundane areas.

Laser and inkjet printers, and the toners and cartridges that go with them, have continued to sell well. They are a play on technology that some fund managers like, especially because of the steady and highly profitable revenue stream that replacement toners and cartridges bring in.

Lexmark(LXK Quote), a manufacturer of printers and cartridges, is attracting many fund managers' attention because of the predictability of its replacement-cartridge revenue stream and its competitiveness in the low-end printer market. It has delivered a strong 40.7% average annualized return over the past five years and is up 33.6% year to date. With a trailing price-to-earnings ratio of 27, Lexmark's stock is not exactly cheap, but analysts are expecting 15.5% annual growth in earnings over the next five years, according to Earnings.com. ...