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Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to and receives compensation. Try it.

Ireland-based Eaton Corp. PLC is a power management company providing energy-efficient solutions to manage electrical, hydraulic and mechanical power. The company sells products to customers in more than 175 countries and has a market cap of $25-billion (U.S.).

The company trades for just 11.8 times TTM EPS. The Peter Lynch-based model likes its 0.77 yield-adjusted PEG ratio [PE/(growth rate +dividend yield)].

Eaton has an impressive 4.1-per-cent dividend. It gets interest from the John Neff-based strategy, which likes that its 1.3 total return/PE ratio (EPS growth + dividend yield, divided by P/E ratio) more than doubles the market average of 0.57. The Neff model also likes its moderate 11.2-per-cent long-term EPS growth rate (based on the average of the 3-, 4-, and 5-year EPS growth rates) and 12.9-per-cent long-term sales growth (using the average of the 3-, 4-, and 5-year sales growth rates).

Eaton has a 35.2-per-cent return on capital, using EBIT/tangible capital employed.

John Reese is long ETN.

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