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MSA (MSA - Snapshot Report) offers investors strong growth and a solid dividend at a very reasonable price.

Based on consensus estimates, analysts project strong double-digit EPS growth over the next few years. And those estimates have been rising after the company delivered record results for the third quarter. It is a Zacks #2 Rank (Buy).

It also pays a dividend that yields 3.1%. Valuation is attractive too, with shares sporting a PEG ratio of 0.8.

Safety First

MSA (which stands for Mine Safety Appliances) manufactures safety products for a wide range of industries. Some of its products include: respirators, gas detection instruments, thermal imaging cameras, fire helmets, ballistic helmets, fall protection, and mining products.

MSA was founded in 1914 and is headquartered in Pittsburgh. It has a market cap of $1.2 billion.

Third Quarter Results

MSA reported record results for the third quarter of 2011. Earnings per share doubled to 54 cents, beating the Zacks Consensus Estimate by 2 cents.

Net sales rose 23% year-over-year to $298 million, ahead of the Zacks Consensus Estimate of $291 million. Excluding the impact of a recent acquisition, organic sales were up 14%. Organic sales in North America, which accounted for 48% of total sales, also rose by 14%.

The company experienced solid revenue growth across most of its core industrial product lines. The fall protection business was particularly strong, growing 21% year-over-year. The gas detection segment grew by 13%.

Meanwhile, the gross profit margin expanded 300 basis points to 40.5% of net sales.

Outlook

Following strong Q3 results, analysts revised their estimates higher for both 2011 and 2012, sending the stock to a Zacks #2 Rank (Buy).

Analysts believe that MSA's late-cycle mix of sales, continued margin expansion and new product development will drive double-digit EPS growth over the next couple of years.

The Zacks Consensus Estimate for 2011 is $2.02, representing 35% growth over 2010 EPS. The 2012 consensus estimate is currently $2.28, corresponding with 13% growth.

Dividend

In addition to strong earnings growth, MSA offers a dividend that yields a very solid 3.1%. Since the year 2000, the company has raised its dividend at a compound annual rate of 21%:

MSA: Mine Safety Appliances

Valuation

The valuation picture looks reasonable too. Shares trade at just 14.5x 12-month forward earnings, a discount to its historical median of 17.7x.

Its PEG ratio is only 0.8 based on a consensus long-term growth rate of 18.3%.

The Bottom Line

With rising earnings estimates, strong growth projections, a 3.1% dividend yield and attractive valuation, MSA offers investors a lot to like.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Co-Editor of the Reitmeister Value Investor.

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