The service industry is one of the most dynamic sectors of an economy. The most developed markets rely on this sector for economic growth. In this article I will be analyzing five promising service stock options which appear to be attractive investments. My analysis will be based on the common indicators and the company’s financial highlights for the last quarter. The five stocks which I feel are worth considering for investment are mentioned below:
Sirius XM Radio Inc (SIRI): This stock is currently trading in the market at a price just above $2 per share. Some experts are predicting that the price might fall and some suggest that it might remain unchanged. The 52-week trading range for this stock is between $1 and $3 per share approximately. Market capitalization at current price is close to $8 billion and the average trading volume is more than 50 million. Earnings per share (EPS) are 7c and the price-to-earnings (P/E) ratio is nearly 31. Beta for this stock is calculated to be 2.04 and the debt-to-equity ratio is 4.28 which depicts that it might be a bit risky to invest in. Net profit margin is close to 14% and the income and sales growth is showing positive trends. A rating of 6 out of 10 has been given to this stock by analysts. The company has beenperforming much better than expected at the start of this quarter. This has reflected positively on its trends in the stock market as well. In my opinion, it would be a good option to invest in this stock. It has a lot of potential for growth and will be able to offer good returns to investors as well.
Service Corp international (SCI): This stock is currently trading in the market at a price just above $11 per share. Some experts believe that the prices will remain unchanged. However, a majority of the experts predict that they will increase. The 52-week trading range for the stock is between $8 and $12 per share. Market capitalization at the current price is more than $2 billion and the average trading volume is almost 782,000. Earnings per share are nearly $1 and the price-to-earnings (P/E) ratio is just above 18. Dividend yield is close to 2%. Beta for this stock is calculated to be 1.58 and the debt-to-equity ratio is 1.35 which indicates that this is a relatively risky investment. However, a rating of 9 has been given to SCI by analysts and experts based on its high sales and income growth. Net profit margins are close to 7%. A discussion on the financial highlights of the company in the fourth quarter of 2011 indicates that the company is extensively planning to grow. They are aiming to increase their free cash flows and also working on their position in the stock market to offer better prospects to investors. I believe that this stock would be a viable option to invest in considering the risks and the returns along with all the other indicators.
Stamps.com Inc (STMP): The current trading price of this stock in the market is approximately $30 per share. Most of the experts and analysts in the industry believe that the price for this stock might remain unchanged for a while. The market capitalization at current price is nearly $444 million and the average trading volume is close to 370,000. The 52-week trading range is between $12 and $33 approximately. Earnings per share are almost $2 and the price-to-earnings (P/E) ratio is just above 21. Beta is calculated to be 1.14 which means that it is relatively safer to invest in the company. Sales and income have been showing positive growth trends and the company also has a significant profit margin. The stock has not been rated highly by the experts and analysts. Profit per share for the company was reported to be 35c in the fourth quarter of last year. This was in fact an increase of 17% since last few quarters. However, investors have been told to remain cautious this year as the situation might change. It is also being reported that this is one of the six stock options which were offering returns last year but there is a possibility that they might not be able to sustain. I believe that investors should not make hasty decisions. It is better to wait and analyze the trends. For now it could be a good investment but that could be for a short term gain.
Apollo Group Inc (APOL): This stock is currently trading in the market at a price just above $52 per share. Some experts and analysts believe that the price will fall while others predict that it will remain unchanged. The current price falls in the middle of the 52-week trading range of $37 and $58 per share approximately. Market capitalization based on current price is close to $7 billion and the average trading volume is close to 2 million. Earnings per share are above $4 while the price-to-earnings (P/E) ratio is nearly 13. Debt-to-equity ratio is lower than 1 which is a positive indicator. Sales are not growing significantly but income and profit margins are showing positive trends. Beta is calculated to be 0.36 which depicts that the risk of investing in this particular stock is low. APOL is categorized as one of the top growth stocks for this year by some analysts. It is also considered to be one of the top five undervalued stocks in the market. I believe that this could be a viable option to invest in and would help in building a diversified portfolio. Risk is relatively lower and returns are significantly higher than most of the other options.
Collectors Universe Inc (CLCT): The current trading price for this stock is close to $16 per share. There are mixed opinions regarding this price. Some experts believe that it will fall while others feel that it will remain unchanged. Market capitalization at current price is nearly $130 million and the average trading volume is almost 19,000. Earnings per share are close to $1 and the price-to-earnings (P/E) ratio is approximately 24. Dividend yield is more than 8%. Beta for this stock is calculated to be 0.87 which indicates that it is a safe investment. The net profit margin is more than 11% and the debt-to-equity ratio has been managed well. The stock is rated at 8 out of 10 by a majority of the experts in the market. Investors are waiting for the dividend announcements for this year. They are advised to do so because it could have an impact on the share prices. If the dividend is 32c or more, then it would be a good option to hold on to. In my opinion, it would be a good option to invest in this stock right now. There are chances of growth and income and risk is low. Capital gains might also be achieved in this quarter.
About the author:I am primarily an investor interested in creating passive income streams through dividends. I focus on finding and analyzing dividend paying stocks, MLPs and REITs that are a good fit for income investors.
I practice Judaism and my faith is very important to me. I visit family in Israel once a year, but I am educated and work in the United States where I hold an MBA and a bachelor’s in English. I am a patient man, enjoy wine but am not a connoisseur, and I listen more than I speak.