As Housing Recovers, Will Machinery Stocks Outperform? : Caterpillar Inc. (CAT)

CNH Global NV (ADR) (NYSE:CNH) is an international construction equipment company based in the Netherlands.  CNH manufactures and distributes a line of agricultural and construction equipment and parts worldwide. It operates in two core segments: Agricultural Equipment and Construction Equipment.  For an investor interested in geographical diversification in the heavy machinery industry, CNH is worth a closer look.

The company holds a $10 billion market capitalization and trades for a modest trailing 12-month P/E ratio of less than 9.5 times.  Income investors may be deterred by the fact that CNH hasn’t paid a regular annual dividend since 2008.  Investors did, however, receive a $10 special dividend in December 2012.  The company performed well during the fiscal third quarter of 2012.  Net sales increased by almost 5%, and diluted earnings per share climbed by more than 17%.  CNH also confirmed full-year 2012 guidance of revenues increasing by 5%.

Bottom Line

While it may seem hard to believe, the U.S. housing market appears to be on the road to recovery.  Many analysts now believe that residential housing construction will add to the economy in 2012 for the first time since 2005.  For investors who want to get ahead of this possible tailwind for the U.S. economy, these three machinery stocks appear to be executing well.  In addition, these three stocks are trading for reasonable valuation multiples, and may be worthy of further research.

The article As Housing Recovers, Will Machinery Stocks Outperform? originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.