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Parker Hannifin (PH - Analyst Report) continues to operate on all cylinders. This Zacks #2 Rank (buy) recently reported record quarterly sales, raised its dividend by 16% and kept its earnings surprise streak alive.

Originally founded in Cleveland in 1938, Parker Hannifin, which manufactures motion and control technologies for industrial and aerospace customers, now employs 55,000 people in 46 countries.

Quarterly Dividend Raised Again

On Apr 27, for the second time this year, Parker Hannifin raised its quarterly dividend. The dividend, payable on June 3, 2011 to shareholders of record as of May 10, 2011, rose 16% to 37 cents per share from 32 cents.

The company ranks among the top 5 in the S&P 500 in consecutive quarterly pay outs, with its streak extending to 244 quarters over 55 years.

Year to date, it has raised the dividend 52%. It currently yields 1.3%.

Record Fiscal 2011 Third Quarter

On Apr 27, the company reported its fiscal 2011 third quarter results and again beat the Zacks Consensus. It also saw its second record quarter in a row.

Sales jumped 24% to a third quarter record of $3.2 billion from $2.6 billion last year. All segments saw double digit increases in sales and order levels.

The Industrial International segment led the way as sales climbed 30% to $1.3 billion compared to a year ago. Industrial North America wasn't far behind, as sales rose 23% to $1.2 billion.

Earnings per share surged to an all-time company record of $1.68 per share, easily beating the Zacks Consensus of $1.54. The company only made 94 cents in the same quarter last year.

It was the 8th consecutive earnings surprise.

Consensus Estimates Rise

Analysts are still evaluating the recent earnings report, but 1 estimate has moved higher in the last week for fiscal 2011 which has pushed the Zacks Consensus up 10 cents to $6.29.

That is earnings growth of 84.9%.

Analysts expect another 12.4% earnings growth in fiscal 2012.

Shares Are Hot But There's Still Value

Shares have been trading near 10 year highs for awhile.

But even with the hot share price, the company isn't expensive.

It has a forward P/E of 14.8, which is just under the 15x cut-off I use for value stocks.

Its price-to-book ratio is 2.9, which is also just under the 3.0 cut-off.

Additionally, the company has a solid return on equity (ROE) of 17.6%.

This Week's Value Zacks Rank Buy Stocks

Due to a series of world events, the Chlor Alkali business has been surprisingly strong in the first quarter of 2011. Olin Corporation (OLN), one of the top 5 Chlor Alkali producers in the world, is expected to grow earnings by the double digits in both 2011 and 2012. This Zacks #1 Rank (strong buy) has a PEG ratio of just 0.6. Read the full article.

The hotel industry is finally seeing growth. Sunstone Hotel Investors, Inc. (SHO) is expected to grow earnings by the double digits in both 2011 and 2012. This Zacks #1 Rank (strong buy) also has attractive valuations with a forward P/E of just 12.3. Read the full article.

Business is good for Snap-on Inc. (SNA). Sales recently rose 11.6% in the first quarter continuing a multi-quarter streak of sales growth. Despite shares busting out to new 3-year highs, this Zacks #1 Rank (strong buy) is still a value stock. Read the full article.

Don't write off Intel Corporation (INTC) just yet. The tech titan surprised everyone by recently reporting record first quarter results. This Zacks #1 Rank (strong buy) is cheap, trading at just 9.9x forward estimates. Read the full article.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.

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