WD-40 Co. (WDFC) has a Zacks #1 Rank. Its stock trades at 17.2x fiscal 2010 consensus EPS estimates and 15.8x fiscal 2011 consensus EPS estimates.

Growth and Income

Analysts estimate that WD-40 Co. will grow its earnings per share at 11.5% annually for the next 3 to 5 years. The stock also offers investors a decent dividend yield of 2.9%.

Company Description

WD-40 Company produces and sells lubricants, hand cleaners, and household cleaners worldwide. Its products include WD-40, 2000 Flushes, Carpet Fresh, and Lava.

Recent Results

On April 8, WD-40 announced second-quarter revenue of $80.6 million, an increase of 30.3% from the year-ago quarter. The company reported EPS of $0.64, easily beating the Zacks Consensus Estimate of $0.38. WD-40 has beaten the Zacks Consensus by an average of 26.0% for the last four quarters.

Management also upped its guidance for fiscal 2010. WD-40 now expects sales of $308 million to $321 million and EPS of $1.92-$2.01. Its previous guidance was sales of $298-$318 million and EPS of $1.80-$1.95.

Analyst Estimates Moving Higher

In light of the company’s better-than-expected second-quarter results and higher guidance, analysts covering WDFC increased their estimates for 2010 and 2011.

In the last seven days, the Zacks Consensus Estimate for fiscal 2010 is up 7 cents, or 3.6%, $2.00. The Zacks Consensus Estimate for fiscal 2011 increased 8 cents, or 3.8%, to $2.18. Analysts expect year-over-year EPS growth of 26.4% in 2010 and 9.2% in 2011.

Industry Leader

WD-40 has a return on equity of 19.8%, compared to the industry average of 15.1%. The company’s net profit margin of 11.4% exceeds the industry’s 7.8%. WDFC has leaner balance sheet with a debt/equity ratio of 0.1% versus the industry average of 10.5%.

The Chart

After reporting strong second-quarter results, WD-40 shares hit a new 52-week high. The stock has managed to hold onto those gains and remains above $34.


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