Estimates have been rising for AMCOL International Corporation ( ACO - Snapshot Report ) after the company delivered a strong first quarter earnings beat on April 27.

It is a Zacks #2 Rank (Buy).

Based on current consensus estimates, analysts project 14% EPS growth this year and 12% growth next year. On top of this, the company pays a dividend that yields a solid 2.5%.

And valuation is attractive too, with shares trading at a discount to their historical median on both a price/earnings and price/book value basis.

Company Description

AMCOL International Corporation develops and markets a wide range of mineral and technology based products which are used in various industrial, environmental and consumer applications. The company reports revenue in the following 4 segments:

Minerals & Materials (52% of total revenue)
Environmental (21%)
Oilfield Services (23%)
Transportation (4%)

It is headquartered in Hoffmann Estates, Illinois and has a market cap of $924 million.

First Quarter Results

AMCOL delivered better than expected first quarter results on April 27. Earnings per share came in at 43 cents, beating the Zacks Consensus Estimate by 3 cents. It was an 10% increase over the same quarter last year.

Sales rose 8% to $235.8 million, driven by a 7% increase in Minerals & Materials and a 24% jump in Oilfield Services.

Gross profit expanded 110 basis points to 27.6% of sales. Meanwhile, operating income increased 16% year-over-year as the operating margin expanded 60 basis points to 9.1%.

Estimates Rising

Analysts revised their estimates higher for both 2012 and 2013 following strong Q1 results, as you can see below:

This sent the stock to a Zacks #2 Rank (Buy).

The Zacks Consensus Estimate for 2012 is now $2.07, representing 14% growth over 2011 EPS. The 2013 consensus is currently 12% higher at $2.31.

Solid Dividend

On top of this growth, Amcol pays a dividend that yields a solid 2.5%.

The company aggressively raised its dividend throughout the first part of the last decade but hasn't increased it since 2008. With strong earnings growth projections and a very manageable payout ratio of 35% based on the 2012 consensus estimate, I wouldn't be surprised to see a dividend hike in the near future.

Reasonable Valuation

Despite strong Q1 results and rising estimates, shares of AMCOL have pulled back recently along with the overall market. This has led to some attractive valuations.

The stock trades at just 13.3x 12-month forward earnings, a discount to its 10-year median of 15.7x. Its price to book ratio of 2.2 is also below its historical multiple of 2.4.

The Bottom Line

With rising estimates, strong growth, a solid dividend and reasonable valuation, AMCOL offers investors a lot to like.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor Service.