Avery Dennison Corp (AVY), Canon Inc. (ADR) (CAJ), Xerox Corporation (XRX): 3 Business Equipment Companies That Seem Equipped to Succeed

Businesses around the world will continue to demand considerable volumes of commercial and office supplies, at least in the foreseeable future. Avery Dennison Corp (NYSE:AVY), Canon Inc. (ADR) (NYSE:CAJ), and Xerox Corporation (NYSE:XRX) are three industry leading companies particularly poised to benefit from the recuperating economy and the resulting increase in demand for business supplies worldwide. Let’s take a closer look at them in order to check if they stand as good long-term investments.

Avery Dennison: Not so pressure-sensitive

Avery Dennison Corp (NYSE:AVY) produces and distributes pressure-sensitive adhesives and materials and other related office and commercial products, like tags and labels, in more than 60 countries. Recently, the company has been undergoing a wide restructuring that is expected to deliver annualized savings of more than $100 million by mid-fiscal-year. Given the opportunities created by this reorganization, analysts expect the firm to deliver an average annual EPS growth rate of around 14% for the next five years. Poised to outperform its peers and having beat estimates last quarter, is this stock a buy?

Management’s long-standing efforts to build a strong brand name and important operations in emerging markets have proven highly profitable in the past. Currently, these markets account for about a third of Avery Dennison Corp (NYSE:AVY)’s Pressure Sensitive Materials (PSM) segment’s revenue and for one-fourth of its Retail Branding and Information Solutions (RBIS) segment’s sales. Going forward, emerging economies should drive growth and contribute to margins in the long-term while helping the firm weather the weakness in developed countries.

Strongly committed with its long-run targets, which include an EPS growth in the 15%-20% range by 2015, management agreed to divest some of its struggling segments and put a strong focus on productivity improvements. Although an attractive investment opportunity, the stock trades at 22.8 times its earnings, surpassing the industry average valuation by 47%. So, you will have to pay a premium if you want to hold this stock.

A Canon in the imaging sector

Canon Inc. (ADR) (NYSE:CAJ) is a worldwide leading company in the professional and consumer imaging equipment and information systems industries. With a wide product portfolio, strong international presence, and an established brand name, this is a firm you will want to watch. Expected to deliver annual EPS growth rates above 18% in average over the next five years, this is a stock to buy. Trading at 13 times consensus earnings, about a 35% discount to its peers, now looks like a good time to acquire a portion of this company.