Over the past five years through Feb. 5, the S&P 500 has grown 59% to Wednesday’s closing price of $3,334.69. Earnings per share growth of 30% (not inflation-adjusted) was an essential catalyst to stock prices throughout the observed period.
While past performance is not a guarantee future results, if you pick up companies that have posted more than 30% growth in their annual earnings per share over the past five years, topping the S&P 500 over the observed period, you have a higher chance of finding good companies.
To provide investors with a reliable estimate of future earnings growth, this search accounts for earnings per share without non-recurring items, as this metric excludes one-time entries.
Intercontinental Exchange
The chart below illustrates that Intercontinental Exchange Inc (ICE, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 34.2% over the past five years.
The Atlanta, Georgia-based financial data and stock exchanges company has a market capitalization of $51.72 billion and a price-earnings ratio of 25.1 versus the industry median of 16.78. The price-sales ratio is 8.05 versus the industry median of 2.87.
Among Wall Street sell-side analysts, three recommend strong buys, eight recommend buys and three recommend holds. The stock has an average target price of $104.12 per share versus the priice of $92.88 at close on Wednesday.
GuruFocus assigned a moderate rating of 4 out of 10 for the company’s financial strength and a very high rating of 9 out of 10 for its profitability.
Huntsman Corporation
The chart below shows that Huntsman Corporation (HUN, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 32.1% over the last five years.
The Woodlands, Texas-based manufacturer and seller of differentiated organic chemical products worldwide has a market cap of $4.98 billion, a price-book ratio of 2 versus the industry median of 1.39 and a price-sales ratio of 0.54 versus the industry median of 0.97.
Wall Street sell-side analysts recommend three strong buys and seven buys. The average price target is $26.88 per share compared to the price of $22.11 at close on Wednesday.
GuruFocus assigned the company a positive financial strength rating of 5 out of 10 and a high profitability rating of 7 out of 10.
Hyatt Hotels
The chart below illustrates that Hyatt Hotels Corporation (H, Financial) has grown its trailing 12-month earnings per share without non-recurring items by 32% over the last five years.
The Chicago, Illinois-based hospitality company has a market capitalization of $9.26 billion, a price-earnings ratio of 19.64 versus the industry median of 31.9 and a price-sales ratio of 1.98 compared to the industry median of 1.54.
Wall Street sell-side analysts recommend three strong buys, three buys, 14 holds and one underperform rating. The average price target is $86.33 compared to the share price of $90.14 at close on Wednesday.
GuruFocus assigned a positive rating of 5 out of 10 for the company’s financial strength and of 6 out of 10 for its profitability.
Disclosure: I have no positions in any securities mentioned in this article.
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