A sleeping giant has awakened.

One of the country’s oldest companies has reinvented itself. Once a stodgy old cyclical company, this Dow stock has used its deep pockets and global brand to create a juggernaut of earnings growth for the next decade.

In a lackluster economy, this company has tripled profits since last year and projects average earnings growth of +20% through 2012. But it’s still cheap. The stock sells for less than 13 times next year’s earnings while also paying a solid 4% yield, compared to a 2.1% yield for the S&P 500.

This company makes products for a wide range of megatrends such as increasing worldwide demand for food, growing demand for fossil fuel alternatives and the increasing advancement of electronics and communications technologies. It also does substantial and growing business in emerging markets.

But this isn’t some fly-by-night company that’s been getting lucky. The stock is a blue chip Dow component that’s been around for more than 200 years.

EI DuPont de Nemours & Co. (NYSE: DD), or DuPont, calls itself a science and technology company, but it’s also one of the largest chemical companies in the world. DuPont offers a wide range of products from six separate business segments including agriculture and nutrition, electronics and communication, safety and protection, performance chemicals, performance materials, performance coatings.

The company primarily makes products used to make other products, such as chemicals used in LCD screens, fertilizer to feed crops and chemicals used to weatherize and paint cars. The company’s trademark products are used in things we see everyday including Teflon, Corian (for countertops and laboratories), Kevlar (stronger-than-steel thread used in tires) and Tyvek (for house wraps, medical packaging and labels).

The company operates in 80 countries on six contents and generated $26 billion of revenue in 2009. Most of DuPont’s sales are generated outside the United States in the first half of 2010, including 19% in emerging markets, which have fast growing economies and should grow in prominence in the future.

Why is it a good investment now?

Sales were up +26% in the second quarter, compared to the year ago quarter, to $8.6 billion. Earnings nearly tripled in the second quarter to $1.27 per share versus $0.46 last year.

All six business segments had double-digit sales increases, with more than +25% volume growth in three of the segments. Agriculture and nutrition (the largest segment accounting for 32% of 2009 sales) sales jumped +16% and pretax profits were up +31% from the year ago quarter, primarily from the North American seed business. This is particularly impressive considering rival seed company Monsanto (NYSE: MON) saw earnings drop -45% in the second quarter. The company said several business earned revenues far in excess of pre-recession levels.

How are they doing it?

As have most corporations in the past couple years, DuPont has reduced costs, to the tune of about -18% in 2009. But the key to growth has been in the company’s research and development. The company says it focuses on market-driven mega trends. In fact, out of the $1.4 billion invested in R&D in 2009, 75% was directed toward megatrends, including 50% toward increasing food production and 15% for reducing dependency on fossil fuels.

This doesn’t just sound good. It’s working. Management says that a surprising 30% of 2010 sales will come from products introduced in just the last four years. Second quarter sales increased in every major region but most of all in the fast growing emerging markets. Year-to-date emerging market sales are up +32% from last year and sales in emerging Asia are up a whopping +58%.

DuPont pays quarterly dividends of $0.41 (since 2007), which were uninterrupted by the recession. The $1.64 annual divided translates to a solid yield of about 4% at current prices — far in excess of chemical majors Dow (NYSE: DOW) and Ashland (NYSE: ASH).

In the second quarter, DuPont upped its 2010 earnings projections from a previous $2.50-$2.70 per share to $2.90-$3.05. The company also forecasts average earnings growth of +20% per year through 2012.

Action to Take –> DuPont has strong, well-diversified and relatively defensive earnings. The company is on track to continue to grow earnings while paying a yield far in excess of the market averages. The stock represent a good value at current prices.