What are we looking for?
High quality industrial names whose short-term operational returns continue to improve.
We screened the industrial sector of North American stock universe, focusing on the following criteria:
- A market capitalization greater than $250-million;
- A 12-month change in economic value-added (EVA) greater than 200 per cent – a positive figure shows us that the company’s profit is increasing at a faster and greater pace than the costs of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax (NOPAT) minus capital expenses;
- A 24-month change in EVA greater than 200 per cent;
- A five-year average return on capital (ROC) of more than 10 per cent. This is a profitability ratio that measures the returns expected for both debt and equity investors. By including such criteria, we are looking for companies with an excellent long-term track record.
For informational purposes, we have also included recent stock price, dividend yield and one-year return.