Value-seeking investors may want to consider the following stocks, as they are growing earnings faster than sales, indicating the existence of efficient operating activities as sales growth is turned into higher net income. The stocks listed below have five-year revenue growth rates at least 5% per annum and five-year net income growth rates of at least 10% per annum.
Microsoft Corp
The first stock to consider is Microsoft Corp (MSFT, Financial), a Redmond, Washington-based developer, manufacturer, licensor and seller of computer software, personal computers and consumer electronics.
The company saw its trailing 12-month revenue increase by 9.6% and its trailing 12-month net income increase by 25.5% on average every year over the last five years.
The stock traded at around $228.99 per share at close on Thursday for a market cap of $1.73 trillion and a trailing 12-month dividend yield of 0.93%.
GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10 to the company.
Wall Street sell-side analysts issued a median recommendation rating of buy for this stock and have generated an average target price of $282.37 per share.
Amazon.com Inc
The second stock to consider is Amazon.com Inc (AMZN, Financial), a Seattle, Washington-based online retail giant.
The company saw its trailing 12-month revenue increase by 28.8% and its trailing 12-month net income increase by 97.7% on average every year over the last five years.
The stock was trading at around $3,057.16 per share at close on Thursday for a market cap of $1.54 trillion. Amazon.com Inc does not pay dividends.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength rating and of 8 out of 10 to its profitability rating.
Wall Street sell-side analysts recommend a median rating of buy for this stock and have produced an average target price of $4,049 per share.
Visa Inc
The third stock to consider is Visa Inc (V, Financial), a credit card services giant based in San Francisco, California.
The company saw its trailing 12-month revenue increase by 11% and its trailing 12-month net income increase by 16.1% on average every year over the last five years.
The stock traded at around $213.75 per share at close on Thursday for a market capitalization of $471.29 billion and a trailing 12-month dividend yield of 0.58%.
GuruFocus assigned the company a score of 6 out of 10 for its financial strength rating and 9 out of 10 for the profitability rating.
Wall Street sell-side analysts recommend a median rating of buy for this stock and have established an average target price of $241.17 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- A Trio of High-Return Businesses with Solid Balance Sheets
- A Trio of High Return Non-Cyclical Stocks to Consider
- 3 Stocks Trading Below the Peter Lynch Fair Value
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