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MSA (MSA - Free Report) delivered record first quarter revenue and earnings on April 25, prompting analysts to revise their estimates significantly higher for both 2012 and 2013.

It is a Zacks #1 Rank (Strong Buy) stock.

The company also recently announced another dividend increase as earnings continue to grow. It currently yields 2.7%.

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 $1.6 billion.

First Quarter Results

MSA reported strong first quarter results on April 25. Earnings per share came in at 64 cents, beating the Zacks Consensus Estimate of 51 cents. It was an 81% increase over the same quarter last year.

Net sales rose 6% year-over-year to $293 million, ahead of the Zacks Consensus Estimate of $289 million. Revenue from the company's five core product groups, Industrial Head Protection, Fall Protection Devices, Portable Gas Detectors, Fixed Flame & Gas Detection Systems, and Self-Contained Breathing Apparatus (SCBA), increased 16%.

Meanwhile, the operating margin expanded 410 basis points year-over-year as the company leveraged its fixed expenses. This led to a whopping 72% in operating income over the same period.

Estimates Rising

Earnings estimates soared for MSA following the Q1 beat, sending the stock to a Zacks #1 Rank (Strong Buy) stock.

The Zacks Consensus Estimate for 2012 is now $2.64, representing 24% growth over 2011 EPS. The 2013 consensus estimate is currently $3.03, corresponding with 15% growth.

Analysts believe that continued solid global sales growth and a high degree of operating leverage will drive double-digit EPS growth over the next few years.

Dividend Rising

MSA also recently announced an 8% increase in its quarterly dividend. Since 2000, the company has raised it at a compound annual rate of 18%.

It currently yields 2.7%.

Reasonable Valuation

Shares of MSA have soared 24% since I last wrote about it on January 17, but the valuation picture still looks reasonable.

The stock trades at 15x 12-month forward earnings, a discount to its 10-year median of 18x.

The Bottom Line

With rising estimates, strong growth prospects, a solid 2.7% yield and reasonable valuation, MSA still offers attractive total return potential.

Read the January 25 article here.

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

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