Over the past five years through Dec. 20, the S&P 500 has risen 54.2% to Friday’s closing price of $3,221.22. A 41% growth in the earnings per share (not inflation-adjusted) of the benchmark for U.S. markets acted as the main catalyst throughout the whole observed period.
Past performance is not a guarantee for future results, but picking stocks that outperformed the S&P 500 in terms of higher earnings per share growth enhances the likelihood of finding stocks that will continue to increase their profitability, which will push share prices higher.
Here are some results of my search, which concern securities that have posted more than 41% growth in their earnings per share in the past five years.
BYD Company
BYD Co. Ltd. (BYDDF, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 44% over the past five years, as shown in the chart below, determining a 20% rise in the share price to $4.80 at close on Friday.
The Chinese global rechargeable batteries and photovoltaic products manufacturer has a market cap of $16.49 billion, a price-earnings ratio of 34.73 and a price-sales ratio of 0.79. The industry has a median of 14.29 for the price-earnings ratio and of 0.57 for the price-sales ratio.
Wall Street sell-side analysts issued a hold recommendation rating for the stock.
MKS Instruments
MKS Instruments Inc (MKSI, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 52.7% over the past five years, as indicated in the chart below. Over the same period, the share price has risen 202.7%, topping the S&P 500 by nearly 150%. The stock closed at $112.54 per share on Friday.
The global provider of scientific and technical instruments to check processes of manufacturing activities has a market capitalization of approximately $6.13 billion, a price-earnings ratio of 36.3 and a price-sales ratio of 3.32. The industry has a median of 19.21 for the price-earnings ratio and of 1.09 for the price-sales ratio.
Wall Street issued a buy recommendation rating for shares of MKS Instruments.
Acushnet Holdings
Acushnet Holdings Corp. (GOLF, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 49.2% over the past five years, as illustrated in the chart below, which caused an 82.5% rise in the share price, topping the S&P 500 index by 31.8%. Shares traded at $32.76 at close on Friday for a market capitalization of roughly $2.46 billion.
The Fairhaven, Massachusetts-based designer, producer and marketer of golf products has a price-earnings ratio of 21.7 versus the industry median of 19.38 and a price-sales ratio of 1.5 compared to the industry median of 1.59.
Wall Street issued a hold recommendation rating for shares of Acushnet Holdings.
Disclosure: I have no positions in any securities mentioned in this article.
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