Stock Watch
Toro Co.: Greener Pastures
Sales are lush and margins are growing for this manufacturer of lawn and yard care equipment.
December 12, 2003
While many people are dreaming of a white Christmas, Toro Co. (TTC) is dreaming of green. The company makes lawn and yard care equipment, specializing in lawnmowers, tractors, snowblowers, trimmers and irrigation systems for professional and residential use.
In 2000, Toro's net profit margins sat at 3.3%. The firm set a goal to widen that margin to 5% by the end of fiscal 2003. By improving efficiency, moving some production to lower-cost facilities and closing two plants, it is on track to exceed its goal.
Value Line is impressed with Toro's initiative and says the company's prospects for the next few years look attractive. Toro has introduced new products and contained costs resulting in a greener balance sheet.
The stock trades at 13 times calendar 2004 consensus earnings estimates of $3.59 per share. Analysts expect profit growth to outpace its peers over the next few years, according to Thomson First Call.
--Erin Burt