MSA - Growth & Income


MSA ( MSA ) offers investors strong growth and a solid dividend at a very reasonable price.

Based on consensus estimates, analysts project strong double-digit EPS growth over the next few years. And those estimates have been rising after the company delivered record results for the third quarter. It is a Zacks #2 Rank (Buy).

It also pays a dividend that yields 3.1%. Valuation is attractive too, with shares sporting a PEG ratio of 0.8.

Safety First

MSA (which stands for Mine Safety Appliances) manufactures safety products for a wide range of industries. Some of its products include: respirators, gas detection instruments, thermal imaging cameras, fire helmets, ballistic helmets, fall protection, and mining products.

MSA was founded in 1914 and is headquartered in Pittsburgh. It has a market cap of $1.2 billion.

Third Quarter Results

MSA reported record results for the third quarter of 2011. Earnings per share doubled to 54 cents, beating the Zacks Consensus Estimate by 2 cents.

Net sales rose 23% year-over-year to $298 million, ahead of the Zacks Consensus Estimate of $291 million. Excluding the impact of a recent acquisition, organic sales were up 14%. Organic sales in North America, which accounted for 48% of total sales, also rose by 14%.

The company experienced solid revenue growth across most of its core industrial product lines. The fall protection business was particularly strong, growing 21% year-over-year. The gas detection segment grew by 13%.

Meanwhile, the gross profit margin expanded 300 basis points to 40.5% of net sales.


Following strong Q3 results, analysts revised their estimates higher for both 2011 and 2012, sending the stock to a Zacks #2 Rank (Buy).

Analysts believe that MSA's late-cycle mix of sales, continued margin expansion and new product development will drive double-digit EPS growth over the next couple of years.

The Zacks Consensus Estimate for 2011 is $2.02, representing 35% growth over 2010 EPS. The 2012 consensus estimate is currently $2.28, corresponding with 13% growth.


In addition to strong earnings growth, MSA offers a dividend that yields a very solid 3.1%. Since the year 2000, the company has raised its dividend at a compound annual rate of 21%:

MSA: Mine Safety Appliances


The valuation picture looks reasonable too. Shares trade at just 14.5x 12-month forward earnings, a discount to its historical median of 17.7x.

Its PEG ratio is only 0.8 based on a consensus long-term growth rate of 18.3%.

The Bottom Line

With rising earnings estimates, strong growth projections, a 3.1% dividend yield and attractive valuation, MSA offers investors a lot to like.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Co-Editor of the Reitmeister Value Investor .

MINE SAFETY APP ( MSA ): Free Stock Analysis Report
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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: MSA

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