ITT is primarily a defense contractor. More than half its $11 billion in sales for 2009 came from defense related products and services. However, it is also a major manufacturer of pumps and water filtration systems for water and sewage treatment. This investment theme related to water is important.

The company has been effective at cutting cost and improving efficiency during the recession. In the future, government spending at all levels is expected to grow... substantially.

ITT is sound financially with debt at only 28% of capital. Its operating income is 9 times its interest expense. The dividend at 1.1% has been growing steadily for years.

At $49/$50 per share the stock looks attractive for moderately aggressive investors who are not bothered by volatility.

Preston F. Sanders is a Chartered Financial Consultant and Registered Investment Advisor. He lives in Washington, Georgia, and can be reached at prestonsanders@bellsouth.net.

NOTE: Any investment can lose value. Don’t buy any stock without a careful evaluation of it’s appropriateness for your situation. See your financial/investment advisor.