*CSX Corporation (CSX)
CSX announced a 3 for 1 split a few weeks ago. The railroads are doing well across the board. Profits and balance sheets are very strong.
CSX has been growing earnings at more than 12% a year for the last five years. Analysts expect that number to grow to over 15%/yr over the next five years. The PE ratio is a little high (28) right now but, if the analysts are correct, that should drop to below 20 within the next year.
The quarterly dividend has been growing steadily over the last decade and is more than adequately covered by earnings. In addition to the good numbers, I’m of the belief that the railroads are on the right side of the battle to make our economy more environmentally friendly. Other than river barges, railroads have always been the most efficient way to move goods from point A to point B, and this is becoming more and more important every day.
Neil Macneale, 2 for 1 Stock Split Newsletter, 2-for-1.com, 408-210-6881, June 2021
*Brady Corporation (BRC)
Founded in 1914, Brady makes identification solutions, including labeling systems and digital scanners. The company also sells workplace-safety products. A diverse customer base spans construction, electronics, telecom, and industrial markets.
A steady diet of acquisitions should help sustain growth. Brady has completed three deals so far in 2021, boosting exposure to fast-growing markets. The June acquisition of Code Corp for $173 million expands Brady’s presence in health care and is expected to boost year-ahead revenue by $50 million.
Brady’s operating growth has accelerated, reflected in a Momentum score of 88, versus 30 a year ago. The Earnings Estimates score stands at 96, up from 36. With that in mind, analyst growth estimates seem conservative. The consensus for fiscal 2021 ending July targets 15% profit growth on 5% higher sales. For fiscal 2022, per-share earnings are expected to climb 17% on revenue growth of 11%. Brady is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, upside stocks.com, 800-233-5922, July 5, 2021