9 High-Growth Large-Caps With Strong Sources Of Profitability
http://seekingalpha.com/article/750631-9-high-growth-large-caps-with-strong-sources-of-profitability
Do you prefer stocks with high earnings growth? We ran a screen that might
serve you as a good starting point.
We began by screening the large-cap sector for stocks with high growth projections, with 5-year projected EPS growth rates above 15%.
Then to analyze these companies' profitability, we ran DuPont analysis on the names. DuPont analyzes profitability by breaking up return on equity (net income/equity) into three components:
ROE
= (Net Profit/Equity)
= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)
= (Net Profit margin)*(Asset turnover)*(Leverage ratio)
Because increases in net margin and asset turnover are considered good things, DuPont focuses on companies with these positive characteristics: Increasing ROE along with,
•Decreasing leverage, (i.e. decreasing Asset/Equity ratio)
•Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio)
Those companies that pass DuPont are seeing positive trends in the sources of their increasing profitability, which adds further weight to the idea that the names are profitable.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall. More investing ideas at Kapitall Wire.
Do you think these companies will meet their high growth expectations? Use this list as a starting point for your own analysis.
List sorted by 5-year projected EPS growth.
1. Marriott International, Inc. (MAR): Operates and franchises hotels and related lodging facilities worldwide. Market cap at $11.56B, most recent closing price at $35.80. 5-year projected EPS growth at 19.86%. MRQ net profit margin at 4.08% vs. 3.64% y/y. MRQ sales/assets at 0.414 vs. 0.317 y/y. MRQ assets/equity at -7.277 vs. 6.32 y/y.
2. Visa, Inc. (V): Operates retail electronic payments network worldwide. Market cap at $101.32B, most recent closing price at $124.47. 5-year projected EPS growth at 19.32%. MRQ net profit margin at 50.12% vs. 39.24% y/y. MRQ sales/assets at 0.07 vs. 0.065 y/y. MRQ assets/equity at 1.292 vs. 1.316 y/y.
3. Starbucks Corporation (SBUX): Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. Market cap at $38.38B, most recent closing price at $50.60. 5-year projected EPS growth at 19.18%. MRQ net profit margin at 9.7% vs. 9.39% y/y. MRQ sales/assets at 0.399 vs. 0.396 y/y. MRQ assets/equity at 1.56 vs. 1.628 y/y.
4. Dollar General Corporation (DG): Operates as a discount retailer of general merchandise in the southern, southwestern, midwestern, and eastern United States. Market cap at $17.39B, most recent closing price at $52.32. 5-year projected EPS growth at 17.64%. MRQ net profit margin at 5.47% vs. 4.55% y/y. MRQ sales/assets at 0.399 vs. 0.355 y/y. MRQ assets/equity at 2.128 vs. 2.302 y/y.
5. Fastenal Company (FAST): The Company Is Engaged As A Wholesaler And Retailer Of Industrial And Construction Supplies. Market cap at $13.05B, most recent closing price at $44.07. 5-year projected EPS growth at 17.13%. MRQ net profit margin at 13.03% vs. 12.42% y/y. MRQ sales/assets at 0.424 vs. 0.42 y/y. MRQ assets/equity at 1.178 vs. 1.18 y/y.
6. Coach, Inc. (COH): Engages in the design and marketing of accessories and gifts for men and women in the United States and internationally. Market cap at $16.67B, most recent closing price at $58.0. 5-year projected EPS growth at 16.39%. MRQ net profit margin at 20.29% vs. 19.57% y/y. MRQ sales/assets at 0.372 vs. 0.349 y/y. MRQ assets/equity at 1.539 vs. 1.562 y/y.
7. Enterprise Products Partners LP (EPD): Provides midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products, and petrochemicals in North America. Market cap at $48.55B, most recent closing price at $54.65. 5-year projected EPS growth at 16.21%. MRQ net profit margin at 5.79% vs. 4.13% y/y. MRQ sales/assets at 0.332 vs. 0.32 y/y. MRQ assets/equity at 2.76 vs. 2.822 y/y.
8. Teradata Corporation (TDC): Provides enterprise data warehousing solutions, including enterprise analytic technologies and services, and integrated marketing software. Market cap at $11.2B, most recent closing price at $66.37. 5-year projected EPS growth at 15.79%. MRQ net profit margin at 14.85% vs. 12.85% y/y. MRQ sales/assets at 0.218 vs. 0.214 y/y. MRQ assets/equity at 1.715 vs. 1.852 y/y.
9. Intuit Inc. (INTU): Provides business and financial management solutions for small and medium-sized businesses, consumers, accounting professionals, and financial institutions in the United States, Canada, India, and the United Kingdom. Market cap at $16.77B, most recent closing price at $57.09. 5-year projected EPS growth at 15.10%. MRQ net profit margin at 37.74% vs. 37.23% y/y. MRQ sales/assets at 0.38 vs. 0.332 y/y. MRQ assets/equity at 1.805 vs. 1.973 y/y.
*Accounting data sourced from Google Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
We began by screening the large-cap sector for stocks with high growth projections, with 5-year projected EPS growth rates above 15%.
Then to analyze these companies' profitability, we ran DuPont analysis on the names. DuPont analyzes profitability by breaking up return on equity (net income/equity) into three components:
ROE
= (Net Profit/Equity)
= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)
= (Net Profit margin)*(Asset turnover)*(Leverage ratio)
Because increases in net margin and asset turnover are considered good things, DuPont focuses on companies with these positive characteristics: Increasing ROE along with,
•Decreasing leverage, (i.e. decreasing Asset/Equity ratio)
•Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio)
Those companies that pass DuPont are seeing positive trends in the sources of their increasing profitability, which adds further weight to the idea that the names are profitable.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall. More investing ideas at Kapitall Wire.
Do you think these companies will meet their high growth expectations? Use this list as a starting point for your own analysis.
List sorted by 5-year projected EPS growth.
1. Marriott International, Inc. (MAR): Operates and franchises hotels and related lodging facilities worldwide. Market cap at $11.56B, most recent closing price at $35.80. 5-year projected EPS growth at 19.86%. MRQ net profit margin at 4.08% vs. 3.64% y/y. MRQ sales/assets at 0.414 vs. 0.317 y/y. MRQ assets/equity at -7.277 vs. 6.32 y/y.
2. Visa, Inc. (V): Operates retail electronic payments network worldwide. Market cap at $101.32B, most recent closing price at $124.47. 5-year projected EPS growth at 19.32%. MRQ net profit margin at 50.12% vs. 39.24% y/y. MRQ sales/assets at 0.07 vs. 0.065 y/y. MRQ assets/equity at 1.292 vs. 1.316 y/y.
3. Starbucks Corporation (SBUX): Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. Market cap at $38.38B, most recent closing price at $50.60. 5-year projected EPS growth at 19.18%. MRQ net profit margin at 9.7% vs. 9.39% y/y. MRQ sales/assets at 0.399 vs. 0.396 y/y. MRQ assets/equity at 1.56 vs. 1.628 y/y.
4. Dollar General Corporation (DG): Operates as a discount retailer of general merchandise in the southern, southwestern, midwestern, and eastern United States. Market cap at $17.39B, most recent closing price at $52.32. 5-year projected EPS growth at 17.64%. MRQ net profit margin at 5.47% vs. 4.55% y/y. MRQ sales/assets at 0.399 vs. 0.355 y/y. MRQ assets/equity at 2.128 vs. 2.302 y/y.
5. Fastenal Company (FAST): The Company Is Engaged As A Wholesaler And Retailer Of Industrial And Construction Supplies. Market cap at $13.05B, most recent closing price at $44.07. 5-year projected EPS growth at 17.13%. MRQ net profit margin at 13.03% vs. 12.42% y/y. MRQ sales/assets at 0.424 vs. 0.42 y/y. MRQ assets/equity at 1.178 vs. 1.18 y/y.
6. Coach, Inc. (COH): Engages in the design and marketing of accessories and gifts for men and women in the United States and internationally. Market cap at $16.67B, most recent closing price at $58.0. 5-year projected EPS growth at 16.39%. MRQ net profit margin at 20.29% vs. 19.57% y/y. MRQ sales/assets at 0.372 vs. 0.349 y/y. MRQ assets/equity at 1.539 vs. 1.562 y/y.
7. Enterprise Products Partners LP (EPD): Provides midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products, and petrochemicals in North America. Market cap at $48.55B, most recent closing price at $54.65. 5-year projected EPS growth at 16.21%. MRQ net profit margin at 5.79% vs. 4.13% y/y. MRQ sales/assets at 0.332 vs. 0.32 y/y. MRQ assets/equity at 2.76 vs. 2.822 y/y.
8. Teradata Corporation (TDC): Provides enterprise data warehousing solutions, including enterprise analytic technologies and services, and integrated marketing software. Market cap at $11.2B, most recent closing price at $66.37. 5-year projected EPS growth at 15.79%. MRQ net profit margin at 14.85% vs. 12.85% y/y. MRQ sales/assets at 0.218 vs. 0.214 y/y. MRQ assets/equity at 1.715 vs. 1.852 y/y.
9. Intuit Inc. (INTU): Provides business and financial management solutions for small and medium-sized businesses, consumers, accounting professionals, and financial institutions in the United States, Canada, India, and the United Kingdom. Market cap at $16.77B, most recent closing price at $57.09. 5-year projected EPS growth at 15.10%. MRQ net profit margin at 37.74% vs. 37.23% y/y. MRQ sales/assets at 0.38 vs. 0.332 y/y. MRQ assets/equity at 1.805 vs. 1.973 y/y.
*Accounting data sourced from Google Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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