Global Presence, Ambitious Goals Make Whirlpool (WHR) a Winner - Barron's

Whirlpool Corp. (NYSE: WHR) shares are cheap compared to competitors, especially considering their position in emerging market such as Brazil and India, and the 35% market share that the corporation holds, according to Barron's.

Barron's notes that investors may be skeptical about Whirlpool's ability to achieve multiyear financial goals, or even hang on to their current earnings power.

Shares are going for just 8x FY11 operating EPS estimates. Enterprise value is $7.7 billion, less than 5x estimated FY10 pretax cash flow of $1.6 billion. WHR also carries $1.6 billion of net debt on the books.

Goals for the future include the following:

• 5% - 7% of annual revenue growth;
  
  
• 10% - 15% annual earnings growth;
  
  
• $15 per share in earnings by FY14; and
  
  
• 8% operating-profit margins.

Some complain that the global appliance market is highly competitive, with limited opportunity for pricing power and lower overall margins. They also have said that not enough details were available at their November investor day.

Whirlpool also pays a $0.43 quarterly dividend, which yields 2.1% at today's price levels. They haven't boosted that dividend since 2004, focusing more on debt repayment and a higher credit rating.

Barron's notes that further depreciation of the company's stock may make it an attractive buyout target with its $600 million in annual free cash flow, however, they also state that WHR has $2.2 billion in unfunded pension liabilities.

Whirlpool has a 15% majority lead in the $120 billion global appliance market. Additionally, revs from Asia and Latin America now make up 28% of their total revs, up from 16% just five-years ago. WHR is expecting those regions to make up 33% of their revs by 2014.

The company sells washers in Brazil for as little as $150, along with pricier models. In India, Whirlpool is currently number 2 as they have begun to adopt to local needs. One offering that they make in India is an inexpensive third-door refrigerator with a special vegetable drawer. Additionally, WHR also has a 75% interest in their Indian division, which carries a current value of $600 million.

All-in-all, with global presence, fair market share, and growing ambitions, Whirlpool may be one stock that won't agitate your portfolio.

Shares are up 3.3% in afternoon trading today.

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