Investors may want to have a look at stocks that have beaten the S&P 500 index (the benchmark for the U.S. market) in terms of a higher earnings per share (EPS) growth rate over the past few years, as these stocks are more likely to represent high-quality companies.
The S&P 500 has grown its EPS by about 6.5% every year over the past five years, resulting in an almost 20% jump in its value (which was around 2,447.33 at close on Tuesday, March. 24).
Past performance is not a guarantee for future results. However, it can be a helpful tool in identigying investment opportunities.
Thus, investors may want to consider Apple Inc (AAPL, Financial), Moody's Corporation (MCO, Financial) and Service Corp International (SCI, Financial), as these companies have a five-year EPS without non-recurring items (NRI) growth rate of more than 6.5%.
Apple Inc
The Cupertino, California-based technology giant has grown its trailing 12-month EPS without non-recurring items by 11.9% every year over the past five full fiscal years. The share price ($246.88 as of March 24) has increased by 98.7% over the past five years.
The stock has a market capitalization of $1.08 trillion, a price-earnings ratio of 19.48 versus the industry median of 13.83 and a price-sales ratio of 4.18 versus the industry median of 0.76.
Wall Street recommends an overweight rating for this stock with an average price target of $321.91 per share.
GuruFocus assigned a positive rating of 6 out of 10 for the company’s financial strength and the highest rating of 10 out of 10 for its profitability.
Moody's Corporation
The New York-based credit ratings agency has grown its trailing 12-month EPS without NRI by 14.8% every year over the past five full fiscal years. On the tailwind of this, the share price ($195.75 as of March 24) increased by 91.7%.
The stock has a market capitalization of $36.65 billion, a price-earnings ratio of 26.37 compared to the industry median of 13.4 and a price-sales ratio of 7.75 versus the industry median of 2.38.
Wall Street recommends an overweight rating for this stock and has established an average price target of $243.20 per share.
GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and the highest profitability rating of 10 out of 10.
Service Corp International
The Houston, Texas-based provider of funeral products and services in North America has grown its trailing 12-month EPS without NRI by 25.5% every year over the past five full fiscal years. Following this, the share price ($37.48 as of March 24) rose by nearly 43%.
The stock has a market capitalization of $6.78 billion, a price-earnings ratio of 18.83 versus the industry median of 14.64 and a price-sales ratio of 2.15 compared to the industry median of 0.85.
Wall Street recommends a buy rating for this stock and has established an average price target of $55.25 per share.
GuruFocus assigned a low score of 3 out of 10 to the company’s financial strength rating and a very high score of 9 out of 10 to the company’s profitability rating.
Disclosure: I have no positions in any securities mentioned in this article.
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