DuPont (DD) still has room to grow

Global chemical and industrial giant DuPont (DD) still has plenty of room to grow. The company sits on a 3.3% dividend yield and a 14 times PE. What's more, it has a dividend history bar none.

Global chemicals and industrial business Du Pont (DD) expects to grow its earnings per share by 12% per annum until 2015 as it brings new products online. This will excite long-term dividend investors who have enjoyed solid returns from the company over the last decade.

DuPont’s (DD) portfolio of businesses has yet to realize its full potential. The company is confident in its future outlook and remains committed to delivering sustained growth through market-driven science and innovation, differentiated management of the capital structure, and steadfast productivity gains linked to external benchmarks.
 
The firm expected sales in the region of $33-$34 billion in 2011 with annual top-line growth coming in at about 7% in the period 2010 through 2015. The firm also expects to save around $300m in 2011 through various cost-savings and productivity gains.
 
DuPont (DD) has also invested heavily in a series of "mega trends" which it has identified alongside rapid population growth over the next five years. These include soaring global demand for food, decreasing dependence on fossil fuels and demand for safety and protection.
 
To highlight the potential growth prospects around the food "mega trend" the company is expecting to enjoy gross margins of between 19% and 21%, between 2013-2015, in these businesses.
 
One of the real miracles about DuPont (DD) is its phenomenal dividend track record. When it declared its four quarter dividend in October 2010, it was the 425th consecutive quarterly dividend since the company’s first dividend 1904. If dividend growth can track earnings growth then investors are well positioned to score in the next few years.
 
This leaves it trading on a 3.38% historic dividend yield, which coupled with good potential capital growth makes the stock attractive.
 
As with most good dividend payers cash flow has been another highlight of DuPont (DD) in 2010. The company expects to generate more than $1.7bn in free cash flow, despite a $500 million voluntary contribution to the principal U.S. pension plan in September.
 
On top of this DuPont (DD) offers investors a diverse range of potential earnings with operations in more than 90 countries include high growth regions such as Asia and Africa.
 
Leading investment strategists are tipping rising profits and cash balances to be a driver of global economic growth in 2011 as companies are forced to deploy their capital. DuPont (DD) provides investors with a handy mix of growth and dividend opportunities and would be a good solid stock to consider for their portfolio.

Your code to embed this article on your website* :

*You are allowed to change only styles on the code of this iframe.

Comments

Add your Comment