Babcock & Wilcox

One of these days, I should start a Boring Portfolio of good stocks that are as dull as dirt. Sometimes I really wonder if people understand that the stock market is more than Google, Apple, Facebook and Twitter.

The truth is there are lots of great companies out there, and many of them barely make a peep. Some of them like Moog ($MOG-A) make it on to the Buy List. Harris ($HRS), a former member, is another good example. If you’ve read me for a while, you may recognize other boring standouts like ACE Limited ($ACE) or Raven Industries ($RAVN). International Flavors & Fragrances ($IFF) is another good example.

Here’s another boring stock to put on your radar, Babcock & Wilcox ($BWC). BWC has a noble history going back nearly 150 years. They developed boilers that were used on early steamships and Teddy Roosevelt’s Great White Fleet. They also helped develop the first nuclear-powered subs.

BWC was eventually forced into bankruptcy as a result of asbestos litigation. The company eventually merged from bankruptcy and was spun-off by McDermott International. BWC started trading on the NYSE three years ago.

Here’s the company’s profile via Yahoo Finance:

The Babcock & Wilcox Company operates as a specialty constructor of nuclear components for various customers in the power and other steam-using industries worldwide. Its Power Generation segment designs, engineers, manufactures, supplies, constructs, and services utility and industrial power generation systems, including boilers used to generate steam in electric power plants, pulp and paper making, chemical and process applications, and other industrial uses. This segment also offers technologies to control nitrogen oxides, sulfur dioxide, fine particulate mercury, acid gasses, and hazardous air emissions; and construction services to steam generation or environmental equipment projects, and cogeneration and combined cycle installations, as well as provides environmental equipment and components, and related services. The company’s Nuclear Operations segment manufactures naval nuclear reactors for the U.S. Department of Energy/National Nuclear Security Administration’s Naval Nuclear Propulsion Program, which in turn supplies them to the U.S. Navy for use in submarines and aircraft carriers. Its Technical Services segment offers services to the U.S. Government comprising uranium processing, environmental site restoration services, and management and operating services for various U.S. Government-owned facilities. The company’s Nuclear Energy segment fabricates pressure vessels, reactors, steam generators, heat exchangers, and other auxiliary equipment. This segment also offers engineering services, such as structural component design, 3-D thermal-hydraulic engineering analysis, weld and robotic process development, and metallurgy and materials engineering. In addition, it provides power plant construction, management, and maintenance services; and services for nuclear steam generators and balance of plant equipment, as well as nondestructive examination and tooling/repair solutions. The company was founded in 1867 and is headquartered in Charlotte, North Carolina.

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The company also has zero long-term debt and trades at 14 times next year’s earnings.

Posted by on January 14th, 2014 at 11:33 am


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