Snap-on, Inc. (SNA) saw a sizeable share price boost on a strong second quarter, sending the stock to a near 52-week high level. Analysts see more growth ahead as evidenced by higher full-year earnings forecasts. The company’s dividend yield of 2.1% remains very competitive when measured against the industry average of 0.9%.

Company Description

Snap-on is a global innovator, manufacturer and marketer of tools, diagnostics, equipment, software and service solutions for professional users. The company’s products and services include hand and power tools, tool storage, diagnostics software, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as customers in industry, government, agriculture, aviation and natural resources. These products and services are sold through the company’s franchisee, company-direct, distributor and Internet channels.

Strong Quarterly Results

The company recently posted second-quarter results. Earnings per share of $1.15, surpassed the year-prior 90 cents and topped the consensus estimate 10%. SNA’s earnings per share were ahead of analyst expectations by an average of 16% over the past 5 consecutive quarters. Sales increased by 7.6% on a year-over-year basis.

”Snap-on’s second quarter operating performance evidences continued achievements in our strategic diversification and growth initiatives,” said Nick Pinchuk, Snap-on’s president and chief executive officer. “Despite the continued macroeconomic challenges, the strength of our global and diverse customer base and the value created by our innovation and rapid continuous improvement processes combined to deliver significant sales and profit improvements. My thanks to our associates and franchisees for their ongoing support and for their crucial roles in achieving another encouraging quarter.”

Estimates are on the Rise

The company noted that it expects sales and earnings for the balance of 2008 will continue to exceed 2007 levels.

Wall Street is also upbeat on SNA’s prospects. Full-year 2008 analyst estimates for earnings of $4.07 per share are above last month’s $4.00. The most accurate projection is higher at $4.09.

Competitive Income

The company’s dividend yield of 2.1% remains very competitive when measured against the industry average of 0.9%.

In early June, Snap-on paid out a quarterly common stock dividend of 30 cents per share.

Content Courtesy: Zacks Investment Research

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