About: Idex has strong and highly profitable positions in a variety of specialised, highly engineered industrial markets. These include pumps, clamping systems, fire suppression equipment and optical filters, and are used in industries ranging from scientific research to fire & rescue to agriculture.

These products perform critical functions for the end users so barriers to entry in these markets are very high. This has supported enviable profit margins.

Why it’s in the portfolio:

Fundamentals: IEX has a market cap of $12b USD, a PE of 27.5x forward earnings, EPS of 5.8x forward earnings and a PEG ratio of around 2.6. The company currently has a 1.3% dividend yield and a 32.0% payout ratio. The company’s debt to assets are currently 24.4% and debt to equity is 42.6%.

What could go wrong?