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Some of the best investments are in the most boring areas of business. But boring companies tend to offer stability and high profit margins. Here is a mid-cap "facilities maintenance products" distributor that fits the bill. Lake Forest, Ill.-based WW Grainger ( GWW) was founded in 1927 as a wholesale electric motor distributor. Its first catalog, the "Motor Book," had eight pages of product information. Today, Grainger boasts a lineup of 800,000 items. It holds about 4% of the $140 billion facilities maintenance market.
The company has an ideal financial position, particularly considering its size. With $257 million of cash and $530 million in debt, Grainger boasts a quick ratio of 1.43 and a debt-to-equity ratio of just 0.27. The cash balance has more than doubled since last year's first quarter. And the net margin stands firm at 6.5%. At a price-to-earnings ratio of about 14, Grainger is fairly priced relative to peers in the trading and distribution industry. The stock offers a safe play on infrastructure growth. And its dividend, at 2.27%, has increased for 37 consecutive years. TheStreet.com Ratings gives Grainger a "buy" recommendation. TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.