The following companies may be of interest to investors, as they have increased their capital spending over the past five years. This suggests that these companies could expect a higher demand for their products and services.
Furthermore, Wall Street analysts expect that these stocks will increase their earnings per share significantly, beating the S&P 500 this year and over the next one to five years.
DexCom Inc
The first company that meets the above-listed criteria is DexCom Inc (DXCM, Financial), a San Diego, California-based medical device company that provides U.S. and international healthcare organizations with glucose monitoring systems.
DexCom allocated $180 million to the purchase of properties and equipment in full year 2019, which marked an increase from the $16.2 million spent in full year 2014.
Wall Street sell-side analysts predict that DexCom will increase its EPS by 17.4% this year, 36.1% in 2021 and 51.95% on average every year over the next five years. The S&P 500 is predicted to record an EPS change of -18% this year, 26% over the next year and 4% on average every year over the next five years.
As of May, analysts recommended eight strong buys, three buys and seven hold ratings. The average target price is $363.56 per share.
The share price has risen by almost 250% over the past year to close at $405.50 on May 8 for a market capitalization of $37.45 billion.
The stock has a price-earnings ratio of 255.03 compared to the industry median of 34.22, a price-book ratio of 40.83 compared to the industry median of 4.09 and a price-sales ratio of 23.47 compared to the industry median of 4.77.
Lumentum Holdings Inc
The second company that meets the above-listed criteria is Lumentum Holdings Inc (LITE, Financial), a Milpitas, California-based manufacturer and seller of optical and photonic products to industries worldwide.
Lumentum Holdings has spent almost $790 million in full year 2019 for the acquisition of several fixed assets including properties, plants, equipment and businesses. This is a considerable amount if we consider that a much smaller amount of $77 million was spent in 2014.
Wall Street analysts estimate that Lumentum Holdings will increase its EPS by 19.3% this year and by 14% on average every year over the next five years.
As of May, sell-side analysts recommended five strong buys, four buys, five holds and one underperforming rating for this stock. The average target price is $93.27 per share.
The share price has risen by 46.4% in the past year to close at a price of $81.21 and a market capitalization of $6.08 billion on May 8.
The stock has a price-earnings ratio of 55.63 versus the industry median of 18.16, a price-book ratio of 3.63 versus the industry median of 1.45 and a price-sales ratio of 3.67 versus the industry median of 0.99.
Rada Electronics Industries Ltd
The third company that meets the above-listed criteria is Rada Electronics Industries Ltd (RADA, Financial), an Israeli developer and marketer of electronics to companies that mainly operate in the aerospace and defense industries.
Rada Electronics Industries has made allocations of about $4.6 million to the purchase of property, plant and equipment in full year 2019, increasing from $328,000 allocated to capital expenditures in full year 2014.
Wall Street analysts forecast that Rada Electronics Industries will increase its EPS by 140% this year and 600% in 2021.
As of May, one analyst recommended a buy rating for shares of this stock and has established an average target price of $8.50 per share.
The share price has risen 17.6% in the past year to close at $4.14 on May 8 for a market capitalization of $179.41 million.
The stock has a price-book ratio of 3.93 versus the industry median of 1.56 and a price-sales ratio of 3.63 versus the industry median of 0.99.
Disclosure: I have no positions in any securities mentioned.
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