If you want to have a higher likelihood to find companies in a good shape from a financial standpoint, you may want to consider the following three stocks, as their trailing 12-month (TTM) Ebitda margins are beating S&P 500's 11.35% as of the writing of this article.
The Ebitda margin, which is calculated as earnings before interest, tax, depreciation and amortization divided by total revenue, is a good indicator of a company's financial health as it excludes the effect of unique decisions and tax laws from the evaluation of a company's performance. These decisions are in regards to the recognition of amortization and depreciation, which may differ significantly even amid companies that operate in the same industry.
Also, Wall Street sell-side analysts seem to think these stocks are a good investment proposition for the several months ahead, as they have issued positive ratings for them.
Johnson & Johnson
The first company that makes the cut is Johnson & Johnson (JNJ, Financial), a New Brunswick, New Jersey-based drug giant.
Johnson & Johnson's Ebitda margin is 29%, as its Ebitda for the trailing twelve months ended in December 2020 was $8.97 per share and revenue was $30.94 per share over the same period.
The share price has grown 24% over the past year to trade at $164.93 at close on Friday for a market capitalization of $434.21 billion and a 52-week range of $125.50 to $173.65.
The stock's forward dividend yield of 2.45% is from an expected quarterly cash dividend of $1.01 per common share and Friday's closing price. The next quarterly payment is scheduled for distribution on Monday, March 29.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $184.25 per share.
Vanguard Group Inc dominates the group of top fund holders with 8.66% of shares outstanding. It is followed by BlackRock Inc. with 7.16% of shares outstanding and State Street Corp with 5.47% of shares outstanding.
LVMH Moet Hennessy Louis Vuitton SE
The second company that makes the cut is LVMH Moet Hennessy Louis Vuitton SE (LVMUY, Financial), a French luxury goods company.
LVMH Moet Hennessy Louis Vuitton SE's Ebitda margin is 30.87%, as its Ebitda for the trailing twelve months ended in December 2020 was $6.65 per share and revenue was $21.54 per share over the same period.
The share price has increased by 70.26% over the past year to close at $131.95 on Friday for a market capitalization of $332.31 billion and a 52-week range of $68.73 to $137.18.
The stock's forward dividend yield of 1.09% is resulting from an expected semi-annual dividend of 95.3 cents per common share and Friday's closing price.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $139.75 per share.
Ken Fisher (Trades, Portfolio) leads the group of top fund holders with 0.47% of shares outstanding. His firm is followed by Parametric Portfolio Associates LLC with 0.05% of shares outstanding and Aristotle Capital Management, LLC with 0.02% of shares outstanding.
Nestle SA
The third stock to consider is Nestle SA (NSRGY, Financial), a Swiss food and beverage company.
Nestle SA's Ebitda margin for today is 21.7%, as its Ebitda for the trailing twelve months ended in December 2020 was $7.26 per share and revenue was $33.46 per share over the same period.
The share price has gained 6.66% over the past year to close at $111.50 on Friday, determining a market capitalization of $314.04 billion and a 52-week range of $101.62 to $122.63.
The stock's forward dividend yield of 2.75% is resulting from Friday's closing price and an expected annual cash dividend of $3.066 per common share to be issued on May 27.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $125.99 per share.
Tom Russo (Trades, Portfolio) dominates the group of top fund holders of the company with 0.36% of shares outstanding. His firm is followed by Ken Fisher (Trades, Portfolio) with 0.15% of shares outstanding and Parametric Portfolio Associates LLC with 0.10% of shares outstanding.
Disclosure: I have no positions in any securities mentioned in this article.
Read more here:
- 3 Stocks With a History of Operating Income Margin Growth
- 3 Risky Picks that Could Pay Off
- A Trio of Stocks Growing Free Cash Flow Fast
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
