Buy Sigma Aldrich (SIAL, Dividend and Aggressive Growth Portfolios)

Sigma-Aldrich Corp (SIAL) develops, manufactures and distributes a wide assortment (173,000 products) of biochemicals, organic chemicals, chromatography products and diagnostic reagents in over 166 countries. The company has grown earnings and dividends at a 13-14% annual rate over the last 10 years while earning approximately 20% on its capital. SIAL should be able to continue this performance because:

(1) increased market penetration in emerging markets as well as with major drug companies, research establishments and universities,

(2) new product introductions in analytical, biology and materials sciences,

(3) acquisitions [Cerillant Corp, Resource Technology Corp., Vetec Quimica Fina Lida of Brazil,

(4) an aggressive cost controls through supply chain initiatives and SG&A management,

(5) an ongoing stock buyback program.

The primary negative for the company is its exposure to currency fluctuations.

SIAL is rated A by Value Line, has a 12% debt to equity ratio and its stock yields 1.0%.