Many previous articles on this site have touted Caterpillar Inc (NYSE: CAT) due to its appeal to growth, value, and income investors. The same is true for Joy Global (NYSE: JOY). Like Caterpillar, Joy Global is in the heavy equipment industry.
Like Caterpillar, it has done very well in recent market action (chart below).
Due to a recent upgrade, Joy Global is up more than 8 percent for the last month of market action. Joy Global is up for the last month, quarter, six months, and year of market action. For 2014, Joy Global has risen nearly 6 percent. Over the last year of market action, Joy Global has soared more than 28 percent.
That is expected to continue based on recent analyst actions.
Since March, there have been 3 positive analyst recommendations. All see sales rising for Joy Machinery. That is certainly reflected in the earnings-per-share projections for Joy Machinery. This year, earnings per share are declining at a rate of 30.50 percent for Joy Machinery. Next year, Joy Machinery is expected to increase its earnings per share by 16.95 percent, based on the consensus of the Wall Street analyst community. The cash flow position is also very bullish for Joy Global
Like Caterpillar, Joy Global is heavily dependent on China and the demand for coal.
China and India are both two of the biggest consumers of coal. For the shareholders of Joy Machinery, that is good news as these are the two most populous countries in the world. That assures a sizeable market for the products of Joy Machinery and Caterpillar. Coal is the fuel source of choice for emerging market nations due to its ease of use. Oil and natural gas require extensive infrastructures. Demand should only increase for coal due to the rising prices of oil and natural gas.
For the shareholders of Joy Global, a 1.80 percent dividend yield pays for the wait.