A Trio of Stocks Growing Earnings Faster than Sales
- By Alberto Abaterusso
Value-oriented investors could be interested in the following stocks, as they are growing earnings faster than sales, indicating the efficient operating activities as profit margins increase with growth.
The below companies have five-year revenue growth rates of no less than 5% per annum and five-year net income growth rates of no less than 10% per annum.
Alphabet Inc
The first stock value investors could be interested in is Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), a Mountain View, California-based tech conglomerate.
The company saw its trailing 12-month revenue increase by 20.1% and its trailing 12-month net income increase by 22.5% on average every year over the last five years.
Alphabet Inc.'s common stock class A:
Alphabet Inc.'s common stock class C:
The price per share of common stock class A closed at $2,032.46, while the price per share of common stock class C closed at $2,044.36 on Thursday, determining a market capitalization of approximately $1.37 trillion. The 52-week range is $1,008.87 to $2,145.14 per share of common stock class A and $1,013.54 to $2,152.68 per share of common stock class C. The tech giant is currently not paying dividends.
GuruFocus assigned a financial strength rating of 8 out of 10 and a profitability rating of 9 out of 10 to the company.
Wall Street sell-side analysts recommend a buy recommendation rating for this stock and have established an average target price of about $2,386.63 per share of common stock class A and of about $2,385.92 per share of common stock class C.
Facebook Inc
The second stock value investor could be interested in is Facebook Inc (NASDAQ:FB), a Menlo Park, California-based social media giant.
The company saw its trailing 12-month revenue increase by 36.8% and its trailing 12-month net income increase by 42.7% on average every year over the last five years.
The stock was trading at around $278.74 per share at close on Thursday for a market cap of $793.76 billion and a 52-week range of $137.10 to $304.67. Currently, Facebook Inc does not pay dividends.
GuruFocus assigned a score of 7 out of 10 to the company's financial strength rating and of 10 out of 10 to its profitability rating.
Wall Street sell-side analysts recommend a median rating of buy for this stock and have produced an average target price of $339.83 per share.
UnitedHealth Group Inc
The third stock value investors may want to consider is UnitedHealth Group Inc (NYSE:UNH), a Minnetonka, Minnesota-based diversified healthcare company.
The company saw its trailing 12-month revenue increase by 10.1% and its trailing 12-month net income increase by 22.3% on average every year over the last five years.
The stock traded at around $371.09 per share at close on Thursday for a market capitalization of $350.8 billion and a 52-week range of $187.72 to $373.80. Also, the stock grants a trailing 12-month and forward dividend yield of 1.35%, as the company currently pays a quarterly dividend of $1.25 per common share.
GuruFocus assigned the company a score of 6 out of 10 for its financial strength rating and 9 out of 10 for the profitability rating.
Wall Street sell-side analysts recommend a median rating of overweight for this stock and have established an average target price of $399.65 per share.
Disclosure: I have no positions in any securities mentioned.
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This article first appeared on GuruFocus.
