Stocks that grow their earnings at a faster pace than the market have a high potential to keep on driving their share prices up. Look at the S&P 500 Index, for example. The benchmark for the US market has grown its annual earnings (not inflation-adjusted) by 41% over the past five years, resulting in a 57.5% increase in its share price to $3,221.29 at close on Dec. 30.
Past performance is not a guarantee of future results, but the following companies that have beaten the S&P 500 in terms of a higher five-year earnings-per-share growth rate are expected to continue to perform well in the next couple of years, according to Wall Street sell-side analysts.
This search considers earnings per share without non-recurring items, as it gives investors a more reliable way to forecast future earnings growth.
Sunny Optical Technology
Sunny Optical Technology (Group) Company Limited (SNPTF, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 44% over the past five years, as illustrated in the chart below. As a result of this, the share price moved up 920.7% to $17.25 at close on Monday, topping the S&P 500 by 863.2%.
The Chinese manufacturer and seller of optical products and other scientific instruments has a market capitalization of $19.11 billion, a price-earnings ratio of 47.55 versus the industry median of 19.43 and a price-sales ratio of 5.02 compared to the industry median of 1.11.
Vulcan Materials Company
Vulcan Materials Company (VMC, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 75.2% over the past five years, as shown in the chart below. Over the same time period, the share price has risen 116.84%, topping the S&P 500 index by 59.3%. The share price closed at $142.53 on Monday.
The Birmingham, Alabama-based producer of building materials has a market capitalization of $18.86 billion, a price-earnings ratio of 31.6 versus the industry median of 14.99 and a price-sales ratio of 3.93 versus the industry median of 0.92.
Wall Street issued an average target price of $161.30 per share of Vulcan Materials Company.
Calavo Growers
Calavo Growers Inc. (CVGW, Financial) has increased its trailing 12-month earnings per share without non-recurring items by 117.2% over the past five years, as illustrated in the chart below. This resulted in a 93.64% increase in the share price, outperforming the S&P 500 index by 36.11%. The share price traded around $91.59 at close on Monday.
The California-based producer of avocados, avocados-based products and other perishable foods has a market cap of $1.61 billion, a price-earnings ratio of 43.82 versus the industry median of 19.4 and a price-sales ratio of 1.35 versus the industry median of 0.89.
Wall Street issued an average target price of $101.00 per share of Calavo Growers Inc.
Disclosure: I have no positions in any securities mentioned in this article.
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:
