Click HERE for my ***PODCAST*** on Roper Industries (ROP).
Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.


And what exactly does Roper do? According to the Yahoo "Profile" on Roper, the company
"...engages in the design, manufacture, and distribution of energy systems and controls, scientific and industrial imaging products and software, industrial technology products, and instrumentation products and services. It operates in five segments: Instrumentation, Industrial Technology, Energy Systems and Controls, Scientific and Industrial Imaging, and RF Technology."

And what about longer-term results? Looking at the "5-Yr Restated" financials on ROP from Morningstar.com, we can see the steady growth in revenue from $.5 billion in 2000 to $1.0 billion in 2004 and $1.2 billion in the trailing twelve months (TTM). Earnings have increased a bit erratically, climbing from $.79/share in 2000 to $.89/share in 2001, then dipping to $.63/share in 2002. However, since 2002, earnings have had a steady growth to $1.24/share in 2004 and $1.42/share in the TTM.
Dividends have also been increasing steadily from $.14/share in 2000 to $.19/share in 2004 and $.20/share in the TTM.
The company has been increasing its number of shares outstanding, apparently for acquisition purposes, from 61 million in 2000 to 74 million in 2004 and 86 million in the TTM. This has not been an excessive growth in shares, with an approximately 50% increase in the float while revenue has nearly tripled and earnings doubled during the same period.
Free cash flow has been positive and growing from $79 million in 2002 to $153 million in 2004 and $183 million in the TTM.

And how about some valuation numbers? Looking at the "Key Statistics" from Yahoo on Roper, we can see that this is a large cap stock with a market capitalization of $3.63 billion. The trailing p/e isn't too bad at 28.08, with a forward p/e (fye 31-Dec-06) even nicer at 21.37. The PEG ratio works out to a nice 1.46 (under 1.50 is reasonable imho.)
And the Price/Sales ratio? According to the Fidelity.com eResearch website, Roper is in the "Diversified Machinery" industrial group, and in fact is priced the richest in valuation relative to this parameter with a Price/Sales ratio of 2.6. Following ROP is Illinois Tool Works (ITW) with a ratio of 2.0, then Pall (PLL) with a Price/Sales ratio of 1.9. Next is Ingersoll-Rand (IR) at 1.3 and Eaton (ETN) at 1.0.

As I noted above, the company pays a small dividend of $.24/share, yielding 0.60%. The last stock split, a 2:1 split, was on August 29, 2005.
And how about a chart? Looking at the "Point & Figure" chart on Roper Industries from Stockcharts.com, we can see that the stock was really moving sideways to lower between February, 2001, when it was trading at $19/share, to a low of $13.50 in February, 2003. The stock broke through resistance in June, 2003, at approximately $18.50, and has trading strongly higher since!
So what do I think? Well, I like this stock! That's why I wrote it up :). Seriously, the stock moved nicely higher today, they guided to the high end of estimates last week and shall be reporting the final quarter's results soon. The Morningstar numbers look nice with fairly steady revenue growth, and strong earnings growth the past few years. The company, in addition, has a small dividend, and has been steadily increasing the amount. The p/e and the PEG are nice, but the Price/Sales ratio suggests, at least within its group, a bit of a high-end valuation. Free cash flow is positive and growing and the balance sheet has a current ratio of over 2.0. There is a large amount of long-term debt however. In addition, the chart looks strong!
Anyhow, that's another stock for you to review! Thanks so much for stopping by and visiting. If you have any comments or questions, please feel free to email me at bobsadviceforstocks@lycos.com or leave your comments right in the blog.
Bob
Updated: Wednesday, 15 February 2006 10:10 PM CST