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Friday July 20, 2012
AZZ: 'Under the radar'
by Neil Macneale, editor 2-for-1 Stock Split Newsletter Each month, we select one stock from among those that have announced 2-for-1 stock splits to add to our model portfolio. AZZ Inc. (AZZ) announced a 2 for 1 split on June 28th, just in time to qualify as our latest selection. With the election coming up and continued craziness around the world, it would be foolhardy to predict where the market or the 2 for 1 portfolio will end up for the year. Nevertheless, we're up 10.4% for the year and are glad we have a strategy that works in all kinds of weather. As to our latest buy recommendation, AZZ is a small manufacturer of industrial electrical components and provider of galvanizing services in North America. The company has a market cap of $1.67 billions, I had never heard of AZZ prior to the split announcement; in this case, a demonstration of the usefulness of the split strategy to ferret out the great companies that are cruising along under the Wall Street radar. The firm makes many of the components you see when driving past your electrical utility’s neighborhood sub-station. It also operates 34 galvanizing plants in the US and Canada, providing services to electrical utilities, the heavy construction industry, and a range of original equipment manufacturers. The company has had an average annual growth rate of over 11% in both sales and earnings over the last five years. Assuming infra- structure spending increases nationwide over the coming years, growth should remain steady. AZZ pays a 1.5% dividend and its stock price is only slightly more volatile than the market’s. PE and price to book ratios are not cheap but are acceptable given the expected growth. It’s unlikely AZZ will be setting the world on fire but this type of solid, no nonsense business is just the type of company that has done very well for the 2 for 1 portfolio over the years. Learn more about this financial newsletter at Neil Macneale's 2-for-1 Stock Split Newsletter. Related articles: 
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