Praxair (PX) 2013 Review

Praxair Inc (PX) is the world’s second largest supplier of industrial gases. It produces atmospheric, process and specialty gases used to enhance performance applications in the metal fabrication, primary metal, chemical, healthcare, electronic, glass, pulp, paper and environmental industries. PX has grown its earnings and dividends at a 13-20% pace annually for the last 10 years and earns a return on equity of approximately 20%. The company suffered both lower volumes and currency difficulties in the recent economic malaise; however, earnings should rebound as a result of:

(1) a major marketing effort expanding its coverage in its operating regions,

(2) an R&D effort that continuously develops new products and applications,

(3) significant growth in its end markets,

Negatives:

(1) its large international operations subject it to foreign government regulations, import/export controls and currency fluctuations,

(2) its major cost is energy which is subject to price fluctuations,

(3) a highly competitive industry.

PX is rated A by Value Line, carries a 56% debt to equity ratio and its stock yields 2.2%.

  Statistical Summary

                 Stock      Dividend         Payout      # Increases  
                Yield      Growth Rate     Ratio       Since 2003

PX            2.2%            11%            40%              10
Ind Ave     1.4                8                22                NA

                Debt/                        EPS Down       Net        Value Line
               Equity         ROE      Since 2003      Margin       Rating

PX            56%           25%            2                15%           A
Ind Ave     33              17              NA               9              NA

     Chart

Note: PX stock made great progress off its March 2009 low, quickly surpassing the downtrend off its June 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).  The wiggly red line is the t50 day moving average,  The Dividend Growth Portfolio owns a full position in PX.  The upper boundary of its Buy Value Range is $105; the lower boundary of its Sell Half Range is $147.

http://finance.yahoo.com/q?s=PX
11/13