Top Picks 2017: Ingersoll-Rand

01/24/2017 6:00 am EST


Charles Carlson

Editor, DRIP Investor

My Top Pick for income investors is a firm that is situated nicely to take advantage of the market's hard pivot toward industrial stocks — a trend that should continue in 2017, explains Chuck Carlson, a specialist in dividend reinvestment plans and editor of DRIP Investor.

With brands including Club Car, Trane, and Thermo King, Ingersoll-Rand PLC (IR) has businesses in a host of sectors.

The firm is involved in heating and air-conditioning systems, commercial and residential building services, and temperature-controlled transports solutions to fluid-management equipment, power tools, and golf and utility low-speed vehicles.

Ingersoll-Rand is coming off a decent third quarter in which profits and revenue beat the consensus estimates. The firm recently boosted its dividend 25% to a quarterly rate of $0.40 per share.

It was the second dividend hike in the last 12 months and highlights the company’s confidence in its future. Overall, the dividend has increased nearly five-fold over the last six years.

Ingersoll-Rand raised its guidance for 2016 overall, and a strengthening economy bodes well for accelerated revenue growth in 2017.

Yielding 2.1%, the stock has been behaving well in recent trading and represents a solid choice for investors who want to expand exposure to industrials. I look for the stock to handily beat the market in 2017.

Ingersoll Rand offers a direct-purchase plan in which any investor may buy the first share and every share of stock directly from the company.

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