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On May 8, 2013, shares of diversified power management company Eaton Corporation (ETN - Analyst Report) hit a 52-week high of $64.70. Eaton Corporation registered a positive earnings surprise of 6.33% in the first quarter of 2013.

Eaton’s earnings in the first quarter were driven by an enhanced portfolio as a result of the Cooper Industries acquisition and its continuous improvement in product offerings.

Eaton is a leading supplier of power accessories in the aerospace industry and has customers spanning 150 countries. The global presence coupled with execution of its operating plans is expected to drive the company in 2013.

Eaton Corporation expects 2013 earnings per share in the range of $4.05 to $4.45, ahead of $3.94 reported in 2012. The major contribution is expected to come from its acquired assets.

We expect 10.01% earnings growth at Eaton on the back of a 4.58% top-line increase. The Zacks Consensus Estimate for 2013 is currently at $4.34 per share and on the higher side of the company’s guidance.

The present valuation also makes the company attractive. Shares of Eaton Corporation currently trade at 14.88x 12-month forward earnings, a 2% discount to the peer group average of 15.19x. Its price-to-book ratio of 2.01 is at a 23.6% discount to the peer group average of 2.63.

The company has consistently paid dividends to its shareholders and increased shareholder worth. The present annual dividend rate of $1.68 per reflects a dividend yield of 2.6%, which is higher than the industry average of 1.14%

Apart from Eaton, other stocks in the industry like A. O. Smith Corporation (AOS - Snapshot Report), Parker-Hannifin Corporation (PH - Analyst Report) and ITT Corporation (ITT - Analyst Report) have also beaten the Zacks Consensus Estimate in the recently concluded quarter.

Dublin, Ireland based Eaton Corporation was founded in 1916. With a market cap of $30.47 billion, the company has 103,000 full time employees. Eaton Corporation currently retains a Zacks Rank #3 (Hold).

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