Shares in manufacturer Ansell Limited (ASX: ANN) have fallen around 8% this calendar year despite a rise of just over 2% in the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO). At $19 a share, the stock is trading roughly mid-way between its 12-month high and low trading range and arguably could be offering long-term investors an appealing entry point.
With a strong long-term outperformance track record and a bright future ahead of it, here are three reasons to consider adding Ansell to your portfolio:
1) Much like fellow global manufacturer Amcor Limited (ASX: AMC), the global operations of Ansell provide an appealing combination of defensive and growth options. As a leading provider of health and safety products in a range of markets around the world such as Australia and North America, and faster growing regions such as Latin America and Africa, Ansell is able to provide shareholders with the ‘best of both worlds.’
2) Thanks to a combination of low capital intensity, scale advantages and solid market positions, Ansell achieves attractive profit margins. At the most recent half yearly results the company achieved an average EBIT margin across the group of 11.8%, an increase of 1.2% on the prior period.
3) With Ansell growing revenues at close to double digit rates and in turn growing earnings at a similar level too, the board has been able to declare a steady stream of increased dividends every year for the past decade. It’s a rare feat to achieve and one that few companies have managed to accomplish – Cochlear Limited (ASX: COH) and Ramsay Health Care Limited (ASX: RHC) are two others which have.
The combination of a solid, diversified and defensive stream of earnings and dividends, coupled with growth opportunities, makes Ansell the type of company for investors looking to build their retirement fortune.