Profit Large Cap Stocks
Most of us are familiar with the phrase built to last. This idea resonates with most investors when they consider which companies will bring in solid returns. Investors want to align with companies that have solid foundations and sustainable business models. For our scan today, we focused on the large cap arena as companies of this size have already experienced and overcome numerous developmental phases. Two traits that speak to endurance and strength are healthy debt ratios and strong earnings. By not leaning heavily on debt to fund growth and maintaining profitability from assets and efficiency, these companies have a solid grip on the finances and operations. If stocks of this nature appeal to you, then you will like our list of large caps below.
Return on Assets [ROA] illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how p michael kors watch rofitable the company is relative to the assets in current possession. As well, it lets investors see how efficient and effective management is at generating earnings from the company’s assets. While most management teams can probably make money by throwing money at an issue very few can make very large profits with little investment.
The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue
The Long Term Debt/Equity Ratio is a variation of the traditional debt to equity ratio; this value computes the proportion of a company’s long term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company’s risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.
The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company’s potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.
We first looked for large cap stocks. Next, we then screened for businesses with strong profitability (ROA > 10%)(Net Margin [TTM]>10%). We then screened for businesses that have maintained a sound long term capital structure (Long Term D/E Ratio
Do you think these large cap stocks have a strong outlook? Please use our list to michael kors watch assist with your own analysis.
1) T. Rowe Price Group, Inc. (TROW)Key MetricsReturn on Assets19.46%Net Margin27.63%Long Term Debt/Equity Ratio0.00Debt/Equity Ratio0.00Short Interest1.53%T. Rowe Price Group, Inc. is a publicly owned asset management holding company. The firm primarily provides its services to individual and institutional investors, retirement plans, and financial intermediaries. T. Rowe Price Group was founded in 1937 and is based in Baltimore, Maryland with additional offices in London, United Kingdom; Central Hong Kong, Hong Kong; Tokyo, Japan; and Singapore.
2) Intuitive Surgical, Inc. (ISRG)
3) Novo Nordisk A/S (NVO)5) Mastercard Incorporated (MA)
6) Infosys Ltd. (INFY)
7) Coach, Inc. (COH)Key MetricsReturn on Assets36.20%Net Margin21.81%Long Term Debt/Equity Ratio0.00Debt/Equity Ratio0.01Short Interest6.06%Coach, Inc. engages in the design, marketing, and distribution of handbags, accessories, wearables, footwear, jewelry, sunwear, travel bags, watches, and fragrances for women and men in the United States and internationally. The company offers women handbags, as well as business cases, computer bags, messenger style bags, and totes for men. Its accessories comprise small leather goods consisting of money pieces, wristlets, and cosmetic cases for wome michael kors watch n, as well as wallets and card cases for men; novelty accessories comprising time management and elect michael kors watch ronic accessories, key rings, and charms; and belts. Coach, Inc. was founded in 1941 and is headquartered in New York, New York.
Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 10/04/2012.