Shares of Thermo Fisher Scientific Inc (TMO, Financial), American Water Works Co Inc (AWK, Financial) and Ormat Technologies Inc (ORA, Financial) have performed strongly over the past several years, beating the S&P 500 index in terms of larger share price gains.
The S&P 500 index, which is used as a benchmark for the U.S. stock market, gained 21% in the past year, 23% in the past two years and 46% in the past three years through Friday, Feb. 14.
The profitability of the these companies has worked as an essential catalyst to the share prices of their stocks over the observed periods. Should the profitability of these companies remain strong over the years to come, shareholders may witness their prices continuing to increase.
Wall Street sell-side analysts have also released positive recommendation ratings for these stocks.
Thermo Fisher Scientific
Shares of Thermo Fisher Scientific have gained 35.2% over the last 52 weeks, 60.2% over the past two years and nearly 114% over the past three years through Feb. 14, outperforming the S&P 500 by 14.2%, 37.2% and 68%, respectively.
The Waltham, Massachusetts-based provider of analytical and other instruments for diagnostics and research worldwide has also paid quarterly dividends over the observed periods. The most recent quarterly dividend of 19 cents per common share was paid on Jan. 15. Based on the share price of $339.19 at close on Feb. 14, the quarterly payment yields 2.22% for the trailing 12-month dividend and for the forward dividend. The S&P 500 yields 1.72%.
GuruFocus assigned a moderate rating of 5 out of 10 for the company's financial strength and a high rating of 9 out of 10 for its profitability.
Thermo Fisher Scientific has an operating margin of 16.2% versus the industry median of -0.2% and a net margin of 14.24% versus the industry median of -1.81%. Further, the company has a return on equity of 12.81% while the industry median stands at 0.6%.
The stock has a market capitalization of $136.01 billion, a price-earnings ratio of 37.03, a price-sales ratio of 5.35 and a price-book ratio of 4.58. These ratios suggest that this stock is not trading cheaply, which is what the below Peter Lynch chart also indicates.
Wall Street sell-side analysts issued an overweight recommendation rating for this stock with an average target price of $354.53 per share.
American Water Works
Shares of American Water Works have gained 41.2% over the last 52 weeks, nearly 73% over the past two years and nearly 90% over the past three years through Feb. 14, topping the S&P 500 by 20.2%, 50% and 44%, respectively.
The Camden, New Jersey-based provider of water and wastewater services in North America has also paid quarterly dividends over the observed period. Currently, the company pays 50 cents per common share. The next quarterly dividend will be sent out to shareholders on March 4. Based on the share price of $139.32 at close on Feb. 14, the payment yields 1.44% for both the trailing 12-month dividend and the forward dividend.
GuruFocus assigned the company a financial strength of 3 out of 10and a profitability score of 7 out 10.
American Water Works has an operating margin of 33.31% versus the industry median of 13.74% and a net margin of 17.85% compared to the industry median of 7.52%. Also, the company has a return on equity of 10.63% versus the industry median of 8.6%.
The stock has a market capitalization of $25.19 billion, a price-earnings ratio of 39.69, a price-sales ratio of 7.11 and a price-book ratio of 4.07. These ratios along, with the below Peter Lynch chart, suggest that the current share price is not cheap.
Wall Street sell-side analysts recommend a hold rating for this stock with an average target price of $132 per share.
Ormat Technologies
Shares of Ormat Technologies have risen 49% over the last 12 months, 35.7% over the past two years and 52% over the past three years through Feb. 14, outperforming the S&P 500 by 28%, 12.7% and 6%, respectively.
The Reno, Nevada-based geothermal and recovered energy power company has also paid quarterly dividends over the observed years. Currently, the company pays a quarterly cash dividend of 11 cents per common share. Based on the share price of $85.78 at close on Feb. 14, the dividend produces a trailing 12-month and a forward yield of 0.51%.
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.
Ormat Technologies has an operating margin of 32.42% compared to the industry median of 17.73% and a net margin of 12.59% versus the industry median of 7.05%. Further, the company has a return on equity of 6.98% compared to the industry median of 6.42%.
The stock has a market capitalization of $4.37 billion, a price-earnings ratio of 46.87, a price-sales ratio of 5.89 and a price-book ratio of 3.17. Based on these ratios and the Peter Lynch chart, the stock is trading above its fair value.
Wall Street sell-side analysts recommend holding shares of this stock and have established an average target price of $75.75 per share.
Disclosure: I have no positions in any securities mentioned.
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