Polaris Industries

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Polaris Industries ( PII) had a stellar year in 2012 -- in the last 12 months, the ATV, motorcycle, and snowmobile maker has rallied around 50%. As one of the best-known names in the motorsports and small utility vehicle segments, PII has little trouble courting customers who've decided they're in the market for a new toy with treads or nubby tires.

Consumer recreation spending looks well positioned to afford Polaris some attractive organic growth for the next few years. But the firm isn't waiting for sales increases in the market -- it's been buying complementary brands for its stable, adding names like Indian Motorcycle and more utilitarian offerings such as small electric vehicles used by institutional customers. That combination of market tailwinds and bargain acquisitions should fuel material top line growth in 2013.

Even though the recreational vehicle industry got stomped after the Great Recession, Polaris sports a solid balance sheet. The firm carries more than $470 million in cash and investments, easily offsetting a $107 million debt load. Dividends have historically been a priority for the firm, and a hike to its 37-cent payout looks probable given its balance sheet strength right now. Currently, Polaris yields 1.69% -- I think we'll see that number climb in the next quarter, possibly after January 29 earnings come out.

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