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Alberto Abaterusso
Alberto Abaterusso
Articles (2608) 

3 Stocks With Fast-Growing Earnings

Analysts expect that these companies will continue performing very well

December 15, 2019 | About:

Rising earnings push share prices higher.

The S&P 500 Index has grown its annual earnings per share (not adjusted to the inflation) by 41% over the past fivr years (about an 8.2% increase every year), pushing the share price up 53% to $3,168.80 at close on Friday.

While past performance is not a guarantee of future results, if you choose companies that have reported more than 41% growth in their annual earnings per share, topping the S&P 500 over the observed period, your search may uncover good performers.

This search considers earnings per share without non-recurring items which, excluding the impact from one-time entries such as infrequent or unexpected gains or losses in the income statement of the company, gives us a reliable estimate of future earnings growth.

Nvidia

The first result of my search is Nvidia Corp. (NASDAQ:NVDA).

The U.S. global semiconductor company has grown its trailing 12-month earnings per share without non-recurring items by nearly 59% over the past five years, as shown in the chart below. Over the same period, Nvidia’s shares climbed 1,044.56% to trade around $223.99 at close on Friday, topping the S&P 500 by an impressive 945%.

Nvidia has a market capitalization of $137.08 billion, a price-earnings ratio of 57.29 versus the industry median of 22.29 and a price-sales ratio of 13.82 versus the industry median of 1.69.

Wall Street issued an overweight recommendation rating for the stock and set an average target price of $232.68.

Essent Group

Essent Group Ltd. (NYSE:ESNT) is the second result of this search.

The Bermuda-based provider of U.S. residential properties-backed private mortgage insurance and reinsurance 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. Over the same period, the share price rose 122.4%, beating the S&P 500 index by 60%. The stock closed at $53.25 per share on Friday.

The stock has a market capitalization of approximately $5.24 billion, a price-earnings ratio of 9.73 versus the industry median of 11.77 and a price-sales ratio of 6.28 compared to the industry median of 2.9.

Wall Street issued an overweight recommendation rating for the stock and established an average target price of $60.14.

Consolidated-Tomoka Land

The third stock is Consolidated-Tomoka Land Co. (NYSE:CTO).

The Florida-based real estate company has increased its trailing 12-month earnings per share without non-recurring items by 78.5% over the past five years, as illustrated in the chart below, pushing the share price up nearly 22% to $62.99 at close on Friday.

The share price growth wasn’t enough for Consolidated-Tomoka Land to beat the S&P 500 index. However, looking ahead, Wall Street sees the stock outperforming the U.S. market within 12 months as its sell-side analysts' board issued an overweight recommendation rating with an average target price of $82. This suggests analysts have a high consideration for Consolidated-Tomoka’s past profitability.

Consolidated-Tomoka Land has a market capitalization of $310.48 million, a price-earnings ratio of 10.8 that matches the industry median and a price-sales ratio of 4.26, which is above the industry median of 2.56.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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