Sigma Aldrich (SIAL) 2013 Review

Sigma-Aldrich Corp develops, manufactures and distributes a wide assortment (185,000 products) of biochemicals, organic chemicals, chromatography products and diagnostic reagents in over 166 countries.  The company has grown earnings and dividends at a 15-16% annual rate over the last 10 years while earning approximately 20% on its capital.  SIAL should be able to continue this performance because:

(1) increased investment in its marketing and R&D effort should spur sales,

(2) the company has upgraded its Life Sciences division via acquisitions and the introduction of new products,

(3) an aggressive cost controls through supply chain initiatives and SG&A      management,

(4) an ongoing stock buyback program.

Negatives

(1)   the current economic uncertainty could negatively impact SIAL’s results,

(2)   increasing costs,

(3)   economic challenges in biotech research.

SIAL is rated A++ by Value Line, has a  10% debt to equity ratio and its stock yields 1.0%.

Statistical Summary

                  Stock      Dividend         Payout      # Increases   

                  Yield      Growth Rate     Ratio       Since 2003

SIAL           1.0%          8%              21%               10

Ind Ave       1.4             8                 22                 NA  

                Debt/                         EPS Down       Net        Value Line

                Equity         ROE      Since 2003      Margin       Rating

SIAL        10%             19%            0                 18%            A++

Ind Ave    33                17              NA                9               NA

      Chart

            Note: SIAL stock made great progress off its March 2009 low, quickly surpassing the downtrend of the August 2008 high (straight red line) and the November 2008 trading high (green line).  Long term the stock is in an uptrend (blue lines).  Intermediate term, it is in an uptrend (purple lines).  Short term, it is in an uptrend (brown line).  The wiggly red line is the 50 day moving average. The Dividend Growth and Aggressive Growth Portfolios own a full position in SIAL.  The upper boundary of its Buy Value Range is $69; the lower boundary of the Sell Half Range is $119.

http://finance.yahoo.com/q?s=SIAL

10/13