Shareholders of L Brands Inc. (LB, Financial), Albemarle Corp. (ALB, Financial) and Bio-Rad Laboratories Inc. (BIO, Financial) saw the value of their shares increase significantly in recent years, outperforming the S&P 500 Index.
The share price of the benchmark index for the U.S. market ($4,352.34 as of July 2) has grown 39% over the past year and 60% over the past three years through July 2.
Wall Street sell-side analysts have also issued positive recommendation ratings for these stocks, indicating expectations for share prices continuing to trade higher in the coming years. In fact, if we have a look at the business these three stocks operate, the first company sells products that people use every day and that are not inclined to reduce even during recessions, as it was for the Covid-19 pandemic, and economic slowdowns.
The second and third company produce products that are used in industries where the turnover is either skyrocketing as technology moves ahead with its innovative consumer electronics or rising with the number of opportunities in the health care industry. The fight against the coronavirus increases the need for chemicals for sanitation as well as products and techniques to improve a medical diagnosis.
L Brands
L Brands (LB, Financial) is a Columbus, Ohio-based retailer of home fragrance products as well as body and beauty care products in North America and internationally. It owns the Bath & Body Works, Victoria's Secret and PINK brands.
Shares of L Brands have risen 374% over the past year and 108% over the past three years through July 2.
L Brands has paid dividends over the years observed, and currently distributes a quarterly cash dividend of 15 cents per common share for a trailing 12-month dividend yield of 1.82% and a forward dividend yield of 0.81% as of July 2.
In terms of financial strength, GuruFocus has assigned a score of 4 out of 10 to the company's balance sheet, which holds $2.81 billion in cash on hand and equivalents and is indebted for $8.35 billion as of April 30. The interest coverage ratio of 5.43 indicates this level of balance sheet leverage does not represent a problem for the company.
In terms of profitability, GuruFocus has assigned a score of 7 out of 10, indicating the company owns higher return operating activities.
The stock was trading at around $74.05 per share at close on July 2 for a market capitalization of $20.50 billion.
The stock has a price-earnings ratio of 14.84 and a price-sales ratio of 1.6. From these ratios it looks that the stock is still trading cheaply.
On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $78.85 per share.
Albemarle
Albemarle (ALB, Financial) is a Charlotte, North Carolina-based manufacturer and marketer of engineered specialty chemicals such as lithium compounds and specialties, several reagents, plus bromine and bromine-based fire safety solutions and catalysts.
Shares of Albemarle have gained 110% over the past year and 80% over the past three years through July 2.
Albemarle has paid dividends in the observed years. Currently, the company is distributing 39 cents per common share every quarter for a trailing 12-month and forward dividend yield of 0.91% as of July 2.
With regard to the financial strength of the balance sheet, GuruFocus has assigned a score of 5 out of 10. The $570 million available in cash on hand and equivalents should offer robust support to the payment of the dividend. Total debt accounted for $2.2 billion as of March 30.
In terms of profitability, GuruFocus has assigned a score of 7 out of 10, indicating the operating activities are yielding a satisfactory amount of net profit to fund ongoing operations.
The stock closed at $170.65 per share on July 2 for a market capitalization of $19.92 billion.
The stock has a price-earnings ratio of 50.94, a price-book ratio of 3.47 and a price-sales ratio of 5.75, suggesting it is not cheap.
On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $166.68 per share.
Bio-Rad Laboratories
Bio-Rad Laboratories (BIO, Financial) is a Hercules, California-based manufacturer and marketer of devices for clinical diagnostic and life science research organizations in North America and internationally.
Shares of Bio-Rad Laboratories have climbed 43% over the past year and 126% over the past three years through July 2.
During the period in question, Bio-Rad Laboratories has not paid dividends.
In terms of financial strength, GuruFocus has assigned a score of 8 out of 10 to the company's balance sheet, as financials state the availability of total $1 billion in cash on hand and equivalents and the existence of a debt of $220 million as of March 30.
In terms of profitability, GuruFocus has assigned a score of 7 out of 10, indicating the operating activities are yielding back strongly. In fact, with its 151.73% rate, the net profit margin is high and abundantly in green territory compared to the industry medium which instead yields -0.21%.
The stock was trading at $666.72 per share at close on July 2 for a market capitalization of $19.80 billion.
The stock has a price-earnings ratio of 4.90, a price-book ratio of 1.87 and a price-sales ratio of 7.45. These ratios indicate the stock isn’t expensive, but not cheap either.
On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $755 per share.
