Investors may find the following stocks interesting, as these represent companies that have grown their capital expenditures in the past five years.
Capital expenditures (aka CapEx) are funds that a company usually uses to carry out new projects or investments to grow the business. Increasing CapEx can precede higher sales and earnings if the money is efficiently and effectively utilized. A company typically only makes high investments in future growth if it expects higher levels of demand to fulfill. Higher sales will ideally lead to higher earnings, which will have positive repercussions on the share prices.
Thus, investors may want to consider the following three stocks, since their sales and earnings are expected to rise as a result of capital spending growth of more than 50% in the past five years.
Texas Pacific
Texas Pacific Land Trust (TPL) is a DallasTexas-based large private landowner.
The company has grown its capital spending over the past five years to $48 million as of the most recent full fiscal year.
As a result, Wall Street analysts forecast a 33% increase in net earnings next year. The stock has a strong buy recommendation rating and an average target price of $937, reflecting a 24.7% upside from Friday’s closing share price of $751.2.
The share price has increased 16% in the past year to trade above the 200-, 100- and 50-day simple moving average lines.
The stock has a market capitalization of $5.83 billion, a price-earnings ratio of 18.67 versus the industry median of 10.97, a price-book ratio of 13.14 versus the industry median of 0.95 and a price-sales ratio of 12.4 compared to the industry median of 0.92.
Matson
Matson Inc. (MATX) is a Honolulu, Hawaii-based provider of ocean transportation and logistics services.
The company has grown its capital spending by 80% in the past five years to $401.2 million as of the most recent full fiscal year.
Wall Street analysts estimate Matson’s net earnings will grow 11.4% in 2020 and 15% per year over the following five years. The stock has an overweight recommendation rating with an average target price of $42.33.
The share price of $39.20 at close on Friday is the result of a 19% increase throughout the past year. Now the share price trades above the 200-, 100- and 50-day simple moving average lines.
The stock has a market capitalization of $1.68 billion, a price-earnings ratio of 19.22 versus the industry median of 14.93, a price-book ratio of 2.11 versus the industry median of 1.16 and a price-sales ratio of 0.76 (which is the same as the industry median).
James Hardie
James Hardie Industries PLC (JHX) is an Irish global manufacturer and seller of fiber cement siding and backer board products.
The company’s capital spending advanced more than 50% in the past five years to $413 million as of the most recent full fiscal year.
Wall Street analysts expect net earnings to grow 15% every year over the next five years and have given the stock an overweight recommendation rating and an average target price of $20.4.
The stock traded at a price of $21.59 per share at close on Friday. The share price has increased 96% in the past year to trade above the 200-, 100- and 50-day simple moving average lines.
The stock has a market capitalization of $9.55 billion, a price-earnings ratio of 38.04 versus the industry median of 15.6, a price-book ratio of 9.17 compared to the industry median of 1.11 and a price-sales ratio of 3.87 versus the industry median of 0.92.
Disclosure: I have no positions in any security mentioned.
Read more here:
- A Trio of High-Quality Stocks
- 3 Stocks With Fast-Growing Earnings
- Wall Street Suggests Catching These 2 Falling Knives
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