Aptargroup ( ATR - Snapshot Report ) grew earnings per share by a whopping 39% in 2010 as the global economic recovery gained traction. Although the company is unlikely to produce this type of growth in 2011, analysts are still calling for solid 12% earnings growth.

It is a Zacks #2 Rank (Buy) stock.

Company Description

Aptargroup supplies pumps, dispensers, closures, and valves for a variety of markets around the globe. Over half of the company's sales come from Europe.

It is headquartered in Crystal Lake, Illinois and has a market cap of $3.29 billion.

Fourth Quarter Results

Aptargroup reported fourth quarter earnings per share of 59 cents, in-line with the Zacks Consensus Estimate. It was a 14% increase over the same quarter in 2009.

Net sales were up 11% excluding currency effects. The Beauty & Home segment was particularly strong, increasing 13% year-over-year thanks to strong demand from the fragrance/cosmetic market. The Pharma segment was also strong with a 10% increase, while Closures were up 8%.

Gross profit as a percentage of sales declined, however, from 34.1% to 32.2% in the period due to rising input costs. Meanwhile, operating income rose 8%.

Outlook

Aptargroup grew earnings per share by a whopping 39% in 2010 as the global economic recovery gained traction. Don't expect this type of growth in 2011, however.

CEO Peter Pfeiffer noted in the Q4 press release that "while we experienced exceptional growth in 2010, we anticipate that generally our segments will reflect more normalized growth rates going forward. Though several challenges lie ahead, including rising input costs and our ability to pass through such increases in a timely manner, we have faced similar challenges in the past."

Analysts are still expecting double-digit earnings growth over the next two years. The Zacks Consensus Estimate for 2011 is $2.77, representing a 12% increase over 2010 EPS. The 2012 consensus estimate is 10% higher at $3.05.

It is a Zacks #2 Rank (Buy) stock.

Income

Aptargroup has a history of rewarding its shareholders through steady dividend increases. It has raised its dividend at a compound annual rate of 21.8% since over the last 10 years, as seen in the chart below:

It currently yields 1.5%.

Valuation

Shares are trading at 17.7x forward earnings, a premium to the industry average of 13.2x, but still reasonable.

Its price to book ratio of 2.6 is slightly above its peers at 2.4, but also still within reason.

Read the September 14 article here.

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Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.