On May 8, 2013, shares of diversified power management company
) hit a 52-week high of $64.70. Eaton Corporation registered a
positive earnings surprise of 6.33% in the first quarter of 2013.
Eaton's earnings in the first quarter were driven by an enhanced
portfolio as a result of the Cooper Industries acquisition and
its continuous improvement in product offerings.
Eaton is a leading supplier of power accessories in the aerospace
industry and has customers spanning 150 countries. The global
presence coupled with execution of its operating plans is
expected to drive the company in 2013.
Eaton Corporation expects 2013 earnings per share in the range of
$4.05 to $4.45, ahead of $3.94 reported in 2012. The major
contribution is expected to come from its acquired assets.
We expect 10.01% earnings growth at Eaton on the back of a 4.58%
top-line increase. The Zacks Consensus Estimate for 2013 is
currently at $4.34 per share and on the higher side of the
The present valuation also makes the company attractive. Shares
of Eaton Corporation currently trade at 14.88x 12-month forward
earnings, a 2% discount to the peer group average of 15.19x. Its
price-to-book ratio of 2.01 is at a 23.6% discount to the peer
group average of 2.63.
The company has consistently paid dividends to its shareholders
and increased shareholder worth. The present annual dividend rate
of $1.68 per reflects a dividend yield of 2.6%, which is higher
than the industry average of 1.14%
Apart from Eaton, other stocks in the industry like
A. O. Smith Corporation
) have also beaten the Zacks Consensus Estimate in the recently
Dublin, Ireland based Eaton Corporation was founded in 1916. With
a market cap of $30.47 billion, the company has 103,000 full time
employees. Eaton Corporation currently retains a Zacks Rank #3
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