Shareholders of Airbus SE (EADSF, Financial), Amphenol Corporation (APH, Financial) and Rentokil Initial plc (RTOKY, Financial) have seen their holdings perform so well that they surpassed the S&P 500 index by large margins over several years.
The S&P 500 index posted a rise of 29% year to date, 30.2% in the past 52 weeks, 44.7% in the past three years and 57.4% in the past five years through Dec. 26, 2019.
The main catalyst to higher shares prices of Airbus, Amphenol Corp, and Rentokil Initial has been their activities’ profitability, which GuruFocus has rated with a score of 7 out of 10. If these companies can keep up their profitability in the years ahead, investors can expect that their stocks will continue to post strong performance as long as the market stays supportive.
In addition to demonstrating high profitability, these companies have positive recommendation ratings from Wall Street sell-side analysts ranging from hold to overweight.
Airbus SE
Shares of Airbus SE, Inc. have gained 52.5% so far this year, 54.3% over the last 52 weeks, 125% over the past three years and 192.6% over the past 5 years through Dec. 26, outperforming the S&P 500 by 23.5%, 24.1%, 80.3% and 135.2%, respectively.
The Dutch provider of aerospace products and services has also paid annual dividends over the observed periods. The last annual dividend of 1.65 Euros ($1.475) per common share was paid on April 17 this year. Based on a $147.05 share price at close on Thursday, the annual dividend produces a 1.27% forward and trailing 12-month dividend yield.
GuruFocus assigned a moderate rating of 5 out of 10 for the company's financial strength and a very positive rating of 7 out of 10 for its profitability.
Airbus SE stands out among its industry with a return on equity of 46.95%, which surpasses 96.41% of competitors operating in the aerospace and defense industry.
The stock has a market capitalization of $114.85 billion, a price-earnings ratio of 27.35, a price-sales ratio of 1.48 and a price-book ratio of 21.85. These ratios, along with the below Peter Lynch chart, suggest the stock is not cheap.
Wall Street sell-side analysts issued an overweight recommendation rating with an average target price of $146.26 per share.
Amphenol Corporation
Shares of Amphenol Corporation have gained 33.3% year to date, 34.2% over the last 52 weeks, 58% over the past three years and 96.4% over the past 5 years through Dec. 26, outperforming the S&P 500 by 4.3%, 4%, 13.3% and 39%, respectively.
The Wallingford, Connecticut-based manufacturer and marketer of electronic and fiber optic connectors has also paid quarterly dividends over the observed periods. Currently, the quarterly cash dividend is 25 cents per common share, which generates a 0.93% forward dividend yield and 0.9% trailing 12-month dividend yield based on the $107.99 share price at close on Thursday. The last quarterly dividend was paid on October 9 this year, while the subsequent one will be paid on Jan. 8 next year.
GuruFocus rated the company's financial strength with a positive score of 6 out of 10 and its profitability with the top score of 10 out of 10.
Concerning Amphenol Corporation’s profitability, the company tops more than 90% of industry competitors in terms of higher operating margin (20.25% versus the average of 3.59%) and higher net margin (14.15% versus the average of 2.7%). It also outperfroms in terms of higher return on equity (28.71% versus the average of 5.48%) and higher return on assets (11.44% versus the average of 2.63%).
The stock has a market capitalization of $32.02 billion, a price-earnings ratio of 28.34, a price-sales ratio of 4.01 and a price-book ratio of 7.7. The stock is not cheap, according to the Peter Lynch chart.
Sell-side analysts issued an overweight recommendation rating with an average target price of $111.31 per share.
Rentokil Initial plc
Shares of Rentokil Initial plc have risen 40.1% year to date, 45.4% over the last 52 weeks, 125.4% over the past three years and 220.5% over the past five years through Dec. 26, outperforming the S&P 500 by 11.1%, 15.2%, 80.7% and 163.1%, respectively.
The English route-based services provider has also paid semi-annual dividends over the periods in question. On Sept. 23 this year, Rentokil distributed a dividend of 9.3 cents per common share, which generates a 0.61% forward dividend yield and a 0.98% trailing 12-month dividend yield as of Thursday at a closing price of $30.32 per piece.
GuruFocus assigned a moderate rating of 4 out of 10 for the company's financial strength and a very positive rating of 7 out of 10 for its profitability.
Regarding profitability, Rentokil has a three-year revenue growth rate of 11.4%, topping 71.2% of competitors that operate in the business services industry.
The stock has a market capitalization of $11.21 billion, a forward price-earnings ratio of 29.15, a price-sales ratio of 3.51 and a price-book ratio of 10.07. The Peter Lynch chart indiacates that the stock is not cheap.
Sell-side analysts issued a hold recommendation rating with an average target price of $29.27 per share.
Disclosure: I have no positions in any securities mentioned.
GuruFocus 15-Year Anniversary Promotion
The holiday season is here, and so is GuruFocus’s 15-year anniversary! In order to celebrate, we are offering an exclusive holiday discount of up to 30% off on our GuruFocus Premium Membership.
Join now to get GuruFocus Premium membership for only $399/Year! In addition, save an extra $100 when you upgrade to our PremiumPlus Membership, and enjoy $100 off the price of each additional region you add to the subscription.
Don’t miss out on this once-in-a-decade deal! You can sign up for the discount price by clicking this link. Happy holidays!
Read more here:
