the Old Economy Can Pay More Than You Might Think With all the financial engineering that’s been going on over the last several years, it’s great to actually find good businesses that are growing based on their own fundamentals.

There’s always a continuing flow of earnings reports, and one company I’ve followed for years just beat the Street again.

Earnings growth rates might not be as robust as they once were, but modest business growth is out there.

One growing company that continues to execute well is AAON, Inc. (NASDAQ/AAON) out of Tulsa, Oklahoma. This company manufactures and installs heating, ventilation, and air conditioning (HVAC) equipment for commercial and residential customers.

The company was founded in 1988 and now has approximately 1.5 million square feet of office and manufacturing facilities, with over 1,300 employees at two plants.

AAON’s first-quarter revenues grew three percent to $66.8 million, mostly based on higher prices. Earnings grew a substantial 56% to $7.1 million, or $0.29 per diluted share, compared to earnings of $4.6 million, or $0.18 per diluted share.

The company said that both its revenues and earnings made new records in the first quarter of 2013.

AAON’s cash balance tripled and the company’s backlog increased 22% to a record $71.7 million comparatively.

On top of this modest but successful business growth, the company boosted its semi-annual cash dividend by 25% and declared a new three-for-two stock split.

I like these kinds of small businesses.

AAON is a company making real products that the marketplace requires. The HVAC industry isn’t the fastest-growing sector, but AAON’s ability to grow its business in a diligent and consistent manner is demonstrable.

The company’s stock market performance is also noteworthy. AAON’s long-term stock chart is featured below:

AAON Inc Chart

Chart courtesy of

With the stock market around its all-time high, I’m reticent about new positions. But there are plenty of companies out there that are worth keeping on your radar in anticipation of more attractive entry points. (See “Why You Should Add Two Medical Stocks to Your Watch List.”)

AAON is about to effect its fifth stock split since listing.

Small-cap stocks have performed similarly to blue chips. Their run-up has been pronounced.

Second-quarter earnings season is quickly approaching, and the marketplace will still bid those companies that beat consensus. Corporations have been deliberately subdued with their earnings outlooks. This has been going on for several years now, and it makes it easier to “outperform.”

Companies like AAON are worth adding to a watch list. Proven track records of business success, earnings growth, and stock market success are golden.

A company like AAON would make a welcome addition to a larger HVAC manufacturer if the company’s management wanted to cash out. AAON’s latest earnings report was solid.