Money Matters - Simplified

4-Star Stocks Poised to Pop: DuPont

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chemicals giant DuPont (NYSE: DD) has earned a respected four-star ranking.

With that in mind, let's take a closer look at DuPont's business and see what CAPS investors are saying about the stock right now.

DuPont facts

Headquarters (founded)

Wilmington, Del. (1802)

Market Cap

$36.6 billion

Industry

Diversified chemicals

Trailing-12-Month Revenue

$30.4 billion

Management

CEO Ellen Kullman (since 2009)
CFO Nicholas Fanandakis (since 2009)

Return on Equity (average, past 3 years)

24.4%

Cash/Debt

$4 billion / $10.2 billion

Dividend Yield

4.1%

Competitors

Dow Chemical (NYSE: DOW)
Monsanto (NYSE: MON)
BASF

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 94% of the 1,522 members who have rated DuPont believe the stock will outperform the S&P 500 going forward. These bulls include witness1260 and All-Star georcole, who is ranked in the top 5% of our community.

A few months ago, witness1260 tapped DuPont as a rather stable selection:

They're everywhere, and everyone uses their products. When have you seen a house under construction that doesn't have TyVek on it? Is there any other teflon? Plus, they've got cash and continue to improve.

Rebounding demand across most of its business categories and geographic segments -- especially in emerging markets -- should carry DuPont's recent momentum into the second half of the year. Last month, the company posted second-quarter profits that nearly tripled and offered full-year guidance that also managed to top expectations. While the stock has crushed its close chemical foes Dow and Monsanto so far in 2010, DuPont's higher returns on capital (subscription required) and ultra-ubiquitous portfolio might just be worth paying up for.

CAPS All-Star georcole explains:

[DuPont] is in many different fields. They make a lot of products for other companies to use to make the final products that the consumer will use. So you will not see as many product names that you are familiar with as you will with companies like 3M or Kraft. That "behind the scenes" type of business may make it harder for you to understand what they do. ... So while you may know of Teflon, think pots and pans, and Tyvek, think house wrap, most products you won't know. ... They make plastics, woods, clothes, electronics, bridges and many other things better.

© 2010 UCLICK L.L.C.