Poor old Hills gets hoist on its own petard the way it's synonymous with clothes lines.

As it turns out, the venerable hoist is worth less than 2 per cent of Hills's annual sales, but there's still no escaping the fact that it depends heavily on consumer spending and confidence is low.

Hills must be one of the few companies to like droughts, and not because they keep the clothes dry. It owns Team Poly water tanks.

Then again, as a diversified manufacturer, it doesn't really matter if something somewhere is going wrong, as it's bound to do.

Come to that, it's not wholly a manufacturer either. Hills has switched some lines to imports and so gains from the relatively strong dollar.

But it loses out from rising steel prices where no respite is in sight barring a recession which is hardly going to help.

It has an enviable record and the recent appointment of a new chief executive from within has meant business as usual.

And what a great business it is: apart from the icon clothes hoist (now being exported to the US) there are toys (the brilliantly conceived Playing Mantis), TV aerials, Bailey and Oldfields ladders, Kelso wheelbarrows, Direct Alarm and Pacific Communications plus heaps of building products under different brand names.

Its profit has risen for 15 consecutive years and although the first half was flat, this year promises to be the sixteenth.

Hills is a no-brainer for DIY super funds - at these prices its fully franked dividend yield is a whopping 7.6 per cent, or 10.8 per cent before tax.

And there can't be much downside from here since its price has already been slashed by some 45 per cent since its peak in August last year, all because of a bear market rather than anything it's done wrong.

Mind you, it took forever for the price to get to its peak in the first place, so it would be gilding the lily to say this is a growth stock.

Especially when the market tends to shy away from diversified manufacturers.

Speaking of which, GWA International or GUD Holdings are mooted as merger or takeover opportunities for Hills, especially while prices are cheap.

Hills also has a 100 per cent payout ratio which would put the dividend at risk in a downturn. Brokers are lukewarm: two say it's a buy, three a hold and one a sell.

Advantages

Track record

Balance sheet

Franked dividend

Takeover opportunities

Disadvantages

Rising costs

Housing slump

High interest rates

Analysts lukewarm

Verdict

Very appealing for DIY super funds: solid, reliable and, best of all, a huge franked dividend yield.