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Global infrastructure plays are managing to hold strong despite the European slowdown. Valmont Industries, Inc. (VMI - Analyst Report) is still expected to post high double digit earnings growth as it saw record sales of irrigation equipment and utility structures in Q1. Yet this Zacks #1 Rank (Strong Buy) is also a value stock with a forward P/E of 13.4.

Valmont manufactures a variety of infrastructure products including poles, towers and structures for lighting and traffic, wireless communication and utility customers.

The company makes a variety of tubing for commercial and industrial applications. It also produces mechanized irrigation equipment for the agriculture industry.

The company has four segments: Utility Support Structures; Irrigation; Engineered Infrastructure Products; and Protective Coatings.

Valmont Beat For The 6th Straight Quarter

On Apr 19, Valmont reported first quarter results and surprised by 25.6%. Earnings were $1.96 compared to the consensus of $1.56. It made just 97 cents in the year ago quarter.

Sales rose 26% to $717.4 million from $567.9 million a year ago. The quarter was boosted by record sales of irrigation equipment and utility structures.

The irrigation segment saw sales rise 30% primarily due to volume leverage and improved manufacturing productivity.

Utility structures were also hot, with sales soaring 52% to $191.2 million due to large project demand to upgrade the North American transmission grid.

But all was not completely rosy. The company definitely saw an impact from the European slowdown especially in the engineered infrastructure products segment where the European lighting and traffic structures markets remained "challenging."

Raised Full Year Guidance

Several of the company's segments look strong for 2012. Irrigation continues to be strong, but it will depend on the farming economy. The Utility Support Structures segment is also particularly strong.

These segments are offsetting weakness in the Engineered Infrastructure Products segment, where a new U.S. highway bill is unlikely to get passed until the new Congress in 2013 and the European slowdown is hitting sales.

But still, Valmont sees a stronger 2012. It raised its full year guidance to EPS over $8.00.

2012 Zacks Consensus Estimate Rises

After Valmont raised its full year guidance, the analysts did the same. The 2012 Zacks Consensus Estimate jumped 8% to $8.19 in the last 60 days.

That is earnings growth of 37.4% as the company only made $5.96 in 2011.

Shares Off 52-Week Highs

Until the May stock market sell off, shares had hit new 52-week highs. Yet the recent slide in the shares has also made Valmont more of a value.

In addition to a P/E under 15, which is my cut-off for value, Valmont also has a price-to-book ratio of 2.3. A P/B ratio under 3.0 usually indicates value.

Valmont also has other solid fundamentals with a 1-year return on equity (ROE) of 16%.

Raised The Dividend

Valmont has been rewarding shareholders in recent years. It did not cut the dividend during the financial crisis.

On Apr 24, Valmont raised its dividend 25% to 22.5 cents for the second quarter. That is more than double what it was paying in 2007/2008 which was just 10.5 cents per share.

That is 90 cents a year which is currently yielding 0.8%. The dividend is payable on July 16 to shareholders of record as of June 29.

Valmont is bucking the trend of a slowing Europe through its diverse portfolio of products and services. This is a value stock with strong growth, a rare combination.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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