first_img Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Rotork. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Simply click below to discover how you can take advantage of this. Enter Your Email Address There’s no denying the quality of the underlying business of Rotork (LSE: ROR). The FTSE 250 company makes industrial actuators and flow control devices. And it serves sectors such as oil & gas production, water supply, wastewater management, power, chemical, mining, pharmaceuticals, manufacturing and others.I reckon the business is well-placed to thrive as the world builds back from the coronavirus pandemic. And today’s full-year results report demonstrates the business navigated the difficulties of 2020 well.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Why I think Rotork is a UK share to buy nowOne of the key indicators, for me, is what the directors did about shareholder dividends. And the news is good. After first postponing payments when the pandemic first hit, they declared today the total payment for the year will go ahead. And it’s 1.6% is higher than the prior year.Although revenue in 2020 came in down 7.4% and adjusted earnings per share slipped by 3.1%, Rotork has a “highly cash generative business.” There’s a multi-year record of generally rising free cash flow. And the balance sheet looks robust with its modest net cash position.And I like the firm’s other quality indicators, such as the return on capital and the operating margin, both running just below 20%. However, the company’s attractions have been acknowledged by the market and the shares come with a full-looking price tag.The stock looks buoyant today on the news of these results. And with the share price near 372p, the forward-looking earnings multiple for 2021 is a little under 30. However, City analysts expect a modest advance in earnings just above 5% for that year.Chairman Martin Lamb explained in the report the outlook for the company’s end markets is improving. Although there’s still uncertainty regarding the future course of the pandemic, Rotork’s production facilities are operating “largely” as normal. And I reckon the relative strength of today’s figures shows the firm traded well last year through the lockdowns.A solid order bookLooking ahead, Lamb also said the order book is “solid”. As reasons to be optimistic about the outlook, he pointed to the “considerable flexibility” provided by the strong balance sheet. He thinks the recent reinvestments into the business have strengthened it and placed it well to benefit from recovering demand.The company’s goal, he said, is to deliver “sustainable” mid-to-high single-digit percentage revenue growth over time. On top of that, the firm is targeting an adjusted operating margin in the “mid-20s”.I see Rotork as a potential long-term quality investment that I’d aim to hold for at least 10 years. But it’s worth noting the business has endured volatile periods in the past. For example, around 2014/15 earnings and the share price dipped. And the stock has only just risen above a trading range and consolidation of some eight years in duration.Nevertheless, I’m tempted by the resilience of the underlying business. And I’d aim to buy some shares on dips and down-days to hold for the long-haul. However, I’m not expecting fireworks ahead. And the high valuation could bite me if earnings fail to grow as expected. 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Kevin Godbold | Tuesday, 2nd March, 2021 | More on: ROR Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Image source: Getty Images. See all posts by Kevin Godboldlast_img

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