Dover Earnings and Value

Dover (A2/A) released earnings that can be considered strong and raised guidance for the full year.  Credit metrics are strong and ratings are secure.  While bookings were somewhat weaker sequentially (primarily seasonal), all other metrics were stronger and growth (coupled with a conservative financial approach) should continue to strengthen metrics.


Stats: 
Revenues (Q) $1.9B  +26% (25% organic)
Revenue YTD$5.3B + 23%;
EBITDA TTM $1.7B
Margins up across all segments YTD;
Net earnings (Q) $223.8MM;
Net earnings (YTD) $501.8MM;
FCF (Q) $157.3MM;
Total Debt $1.839B vs $1.86B YE
Working capital was a net consumer of cash for the quarter.
Bookings:  order rates increased 27% (YoY) book-to-bill of 0.96;  Sequential bookings were lower across all segements except electronic technologies.  Weakest sequential bookings took place within mobile equipment and engineered products.;
Backlog of $1.3B

Net debt / capital:  14.8% vs 18.4% YE '09- lower debt and higher cash.
Debt / Capital:  29% vs 31% YE '09
Debt/EBITDA:  1.03x
Cash:  $866MM vs $714MM 12/09

DOV estimates full year revenue growth will be 20%-21% (organic growth of 16.5%-17.5%).  Co expects that FCF will equal 10% of revenues.

Value:
DOV 4.875 '15   +73/5yr            A2/A
DOV   '18            +40/30 10yr    A2/A
ITW 6.25 '19      +70/10yr          A1/A+
Hubbell 5.95 '18  +63/10y       A3/A

Better buyer of ITW or Hubbellat these levels.  Both can be somewhat scarce.