Snap-on Incorporated: Beat Inflation With This Fairly Priced Dividend Stock
Imagine a stock that beats the S&P 500 while also offering a higher starting dividend yield and a lower price to earnings ratio.
Now imagine that this mystery stock also raises its dividends at a rate that outpaces inflation. With the latest hike being a full 14.8%!
The company you’re imagining is Snap-on Incorporated ($SNA).
Snap-on makes tools like hammers and wrenches, as well as diagnostic equipment and auto repair devices.
This is a company that’s been in business for over 100 years. And today, we’ll look at what makes Snap-on successful. And whether or not its a good investment.
What Does Snap-on Incorporated Do?
Snap-on makes tools. Which doesn’t sound like much of a niche at first, there are dozens of companies that make hammers and wrenches — until you look at Snap-on’s specific brands.
The company makes a lot of tools for the aerospace and automotive industries.
As the company website explains, Snap-on tools are used in:
[T]he manufacture and repair of small private airplanes, military helicopters, the most advanced commercial jets, or even the latest space rockets.
Snap-on also owns several brands like autoVHC, AutoCrib, Car-O-Liner, and Cartec. All of which produce tools for diagnosis car troubles and repairing damaged vehicles. This is a company that goes above and beyond simply making hammers and screwdrivers.
As vehicles get more complex, Snap-on stands to benefit.
Snap-on is also a parallel play on oil, green energy, mining, trucking, and the defense sector — since Snap-on tools are used in all of these industries.
Snap-on Incorporated Fundamentals
Snap-on is one of those stocks the general public is uninterested in.
Tools aren’t sexy or exciting, and this company isn’t weird enough to generate interest the way funeral home conglomerate Service Corporation International is.