Opinions
David Burrows
RPM International
RPM-N
PAST TOP PICK
Jun 04, 2015
$49.770
Stock price when the opinion was issued
Consumer Products
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The very low cost of natural gas in the US versus the rest of the world, gives chemical companies an enormous advantage in North America. This company makes a number of specialty chemical products. About 65% goes to industry. There is a pickup in the industrial economy, and they are a big beneficiary. For example, they have a chemical that you can spray on work boots, so that when a worker walks around the construction site, they will gather no mud.
Consumer Products
TOP PICK
Stockchase Research Editor: Michael O'Reilly RPM is a $10 billion market cap producer of waterproofing coatings. It recently reported revenue growth of 19% and widening margins, which resulted in EPS rising 43% from a year ago. Management acknowledges that sales growth, particularly in the consumer sector, will slow next year as the pandemic lockdowns end; however, we expect this will open the door for industrial sales growth returning. It pays a decent dividend, backed by a 36% payout ratio of cash flow. We would buy this with a stop loss at $75, looking to achieve $109 -- upside potential exceeding 26%. Yield 1.77% (Analysts’ price target is $99.83)
Consumer Products
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(Top Pick Jun. 12/14, Up 13.57%) Benefit from low cost Nat gas. It is one of the first places consumers are spending money as the economy improves in the US. You want low dividend payouts that are growing more rapidly, not the other way round.