Companies that have positive and steady net margin and operating margin are often good investments because they can return a solid profit to investors.
According to the GuruFocus discounted cash flow calculator as of April 20, the following undervalued companies have a high margin of safety and have grown their margins over a 10-year period.
Intel
Intel Corp.'s INTC net and operating margin have grown 20.79% and 28.69% per annum, respectively, over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 20.86% margin of safety at $60.36 per share. The price-earnings ratio is 12.79. The share price has been as high as $69.29 and as low as $42.86 in the last 52 weeks; it is currently 12.89% below its 52-week high and 40.83% above its 52-week low.
The chipmaker has a market cap of $258.37 billion and an enterprise value of $274.25 billion.
The company's largest guru shareholder is Ken Fisher (Trades, Portfolio) with 0.63% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 0.58% and Chris Davis (Trades, Portfolio) with 0.20%.
Walt Disney
The net margin of The Walt Disney Co. DIS has grown 15.63% per annum over the past 10 years. The operating margin has grown 22.31%
According to the DCF calculator, the stock is undervalued with a 15.94% margin of safety at $106.63 per share. The price-earnings ratio is 18.01. The share price has been as high as $153.41 and as low as $79.07 in the last 52 weeks; it is currently 30.49% below its 52-week high and 34.86% above its 52-week low.
The entertainment company has a market cap of $192.51 billion and an enterprise value of $238.77 billion.
The company's largest guru shareholder is Yacktman Asset Management (Trades, Portfolio) with 0.21% of outstanding shares, followed by PRIMECAP Management with 0.19%, Pioneer Investments (Trades, Portfolio) with 0.18% and Diamond Hill Capital (Trades, Portfolio) with 0.16%.
Comcast
Comcast Corp. CMCSA has grown its net margin and operating margin by 10.86% and 20.92% annually over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 51.47% margin of safety at $38 per share. The price-earnings ratio is 13.46. The share price has been as high as $47.74 and as low as $31.70 in the last 52 weeks; it is currently 20.23% below its 52-week high and 20.11% above its 52-week low.
The diversified media company has a market cap of $173.38 billion and an enterprise value of $271.24 billion.
The company's largest guru shareholder is Dodge & Cox with 1.86% of outstanding shares, followed by First Eagle Investment (Trades, Portfolio) with 0.71% and Barrow, Hanley, Mewhinney & Strauss with 0.36%.
Union Pacific
The net margin of Union Pacific Corp. UNP has grown 21.41% per annum over the past decade. The operating margin has grown 36.41 annually over a 10-year period.
According to the DCF calculator, the stock is undervalued with an 18.79% margin of safety at $149.89 per share. The price-earnings ratio is 17.87. The share price has been as high as $188.96 and as low as $105.08 in the last 52 weeks; it is currently 20.68% below its 52-week high and 42.64% above its 52-week low.
The public railroad operator has a market cap of $101.71 billion and an enterprise value of $127.85 billion.
The company's largest guru shareholder is Steve Mandel (Trades, Portfolio)’s Lone Pine Capital with 0.47% of outstanding shares, followed by First Eagle Investment with 0.39%, PRIMECAP Management with 0.38% and Spiros Segalas (Trades, Portfolio) with 0.31%.
Honeywell International
Honeywell International Inc.'s HON net margin and operating margin have grown 10.29% and 14.94% annually over the past 10 years.
According to the DCF calculator, the stock is undervalued with a 16.45% margin of safety at $138.32 per share. The price-earnings ratio is 5.27. The share price has been as high as $184.06 and as low as $101.08 in the last 52 weeks; it is currently 26.65% below its 52-week high and 33.57% above its 52-week low.
The industrial conglomerate has a market cap of $97.83 billion and an enterprise value of $104.33 billion.
With 0.26% of outstanding shares, PRIMECAP Management is the company's largest guru shareholder, followed by Pioneer Investments with 0.24% and Mairs and Power (Trades, Portfolio) with 0.17%.
Starbucks
The net margin of Starbucks Corp. SBUX has grown 12.73% per annum over the pastdecade. The operating margin has grown 15.13% annually over a 10-year period.
According to the DCF calculator, the stock is undervalued with an 11.49% margin of safety at $77.10 per share. The price-earnings ratio is 25.20. The share price has been as high as $99.72 and as low as $50.02 in the last 52 weeks; it is currently 23.99% below its 52-week high and 51.54% above its 52-week low.
The company, which sells coffee, tea and cold blended beverages, has a market cap of $90.49 billion and an enterprise value of 108.01 billion.
The company's largest guru shareholder is Bill Ackman (Trades, Portfolio) with 0.47% of outstanding shares, followed by Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 0.42%% and Pioneer Investments with 0.13%.
Disclosure: I do not own any stocks mentioned.
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