2017-05-18 / The Motley Fool

The Motley Fool Take

Electric Potential

Whirlpool (NYSE: WHR), the largest appliance manufacturer in the world, is trading at an appealing price for longterm investors. After years of growth, the company has experienced a few hiccups that have caused skeptics to flee its stock, dropping the price.

Whirlpool has had to deal with weakness in Europe, partly due to Britain’s looming exit from the E.U., along with adverse currency fluctuations. While these factors have tempered growth for its appliances business, they’re likely to be just temporary speed bumps for Whirlpool.

With North America accounting for about half of total revenues, Whirlpool’s long-term strategy to infiltrate faster-growing emerging markets in Asia, Africa and the Middle East is unaffected by currency fluctuations and the growth hiccup caused by Brexit.

Investors should care most about how the company is performing from an operating perspective, and on that count, it’s doing well. Revenue in its latest quarter grew by nearly 4 percent over year-earlier levels, while earnings per share growth approached 5 percent. Importantly, revenue from Latin America and Asia grew by double digits.

Whirlpool’s dividend grew by 10 percent this year, yielding 2.4 percent. With its strong and diverse brands such as Maytag, KitchenAid, Jenn-Air, Amana and Hotpoint and a forward-looking price-to-earnings (P/E) ratio recently near 12, Whirlpool should appeal to value investors. ¦

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