AAON Inc. (AAON), which is set to announce results for the fourth quarter on March 11, offers a return on equity (ROE) of 29%, exceeding the industry average of 14%. The company also boasts a solid balance sheet with no debt. AAON’s dividend yield of 2% is in line with the industry average.

Company Description

AAON Inc. is a manufacturer of semi-custom and custom heating and cooling products Incorporatedluding air handlers, condensing units, chillers, rooftop units and boilers. The company’s products serve the commercial and industrial new construction and replacement markets.

Solid Income

The company recently declared a semi-annual cash dividend of 16 cents per share, which was paid out on January 2. AAON’s dividend yield of 2% is in line with the industry average.

Record Results in the Third Quarter

In early November, the company posted record results for the third quarter. Net sales reached a record high of $79.3 million, up 12% year-over-year. Earnings per share of 47 cents soared past the year-prior 28 cents and topped the consensus estimate by 20.5%.

President and CEO Norman H. Asbjornson said, “the increase in sales was attributable to our diversified customer mix, an excellent response to many of our new and redesigned products and price increases. The increase in net income resulted form both higher volume and improved productivity.”

Asbjornson added that the company expects a traditionally weaker fourth quarter, but record sales and earnings for the year 2008.

The company is scheduled to announce results for the fourth quarter and full year on March 11.

Estimates are on the Rise

AAON delivered a profit of $1.49 per share in 2007 Analysts are calling for earnings of $1.55 per share in 2008, a 27.5% increase. Three months ago, analysts were forecasting $1.43 per share.

Fundamentals are Strong

The company offers a return on equity (ROE) of 29%, exceeding the industry average of 14%. The company also boasts a solid balance sheet with no debt. AAON has a price-to-sales (P/S) multiple of 0.91.

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