3 High Ebitda Margin Ratio Stock Picks

Their financials are in good condition

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Alberto Abaterusso
Mar 29, 2021
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If you want to have a higher likelihood to find companies in a good shape from a financial standpoint, you may want to consider the following three stocks, as their trailing 12-month (TTM) Ebitda margins are beating S&P 500's 11.35% as of the writing of this article.

The Ebitda margin, which is calculated as earnings before interest, tax, depreciation and amortization divided by total revenue, is a good indicator of a company's financial health as it excludes the effect of unique decisions and tax laws from the evaluation of a company's performance. These decisions are in regards to the recognition of amortization and depreciation, which may differ significantly even amid companies that operate in the same industry.

Also, Wall Street sell-side analysts seem to think these stocks are a good investment proposition for the several months ahead, as they have issued positive ratings for them.

Johnson & Johnson

The first company that makes the cut is Johnson & Johnson (

JNJ, Financial), a New Brunswick, New Jersey-based drug giant.

Johnson & Johnson's Ebitda margin is 29%, as its Ebitda for the trailing twelve months ended in December 2020 was $8.97 per share and revenue was $30.94 per share over the same period.

The share price has grown 24% over the past year to trade at $164.93 at close on Friday for a market capitalization of $434.21 billion and a 52-week range of $125.50 to $173.65.

The stock's forward dividend yield of 2.45% is from an expected quarterly cash dividend of $1.01 per common share and Friday's closing price. The next quarterly payment is scheduled for distribution on Monday, March 29.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $184.25 per share.

Vanguard Group Inc dominates the group of top fund holders with 8.66% of shares outstanding. It is followed by BlackRock Inc. with 7.16% of shares outstanding and State Street Corp with 5.47% of shares outstanding.

LVMH Moet Hennessy Louis Vuitton SE

The second company that makes the cut is LVMH Moet Hennessy Louis Vuitton SE (

LVMUY, Financial), a French luxury goods company.

LVMH Moet Hennessy Louis Vuitton SE's Ebitda margin is 30.87%, as its Ebitda for the trailing twelve months ended in December 2020 was $6.65 per share and revenue was $21.54 per share over the same period.

The share price has increased by 70.26% over the past year to close at $131.95 on Friday for a market capitalization of $332.31 billion and a 52-week range of $68.73 to $137.18.

The stock's forward dividend yield of 1.09% is resulting from an expected semi-annual dividend of 95.3 cents per common share and Friday's closing price.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $139.75 per share.

Ken Fisher (Trades, Portfolio) leads the group of top fund holders with 0.47% of shares outstanding. His firm is followed by Parametric Portfolio Associates LLC with 0.05% of shares outstanding and Aristotle Capital Management, LLC with 0.02% of shares outstanding.

Nestle SA

The third stock to consider is Nestle SA (

NSRGY, Financial), a Swiss food and beverage company.

Nestle SA's Ebitda margin for today is 21.7%, as its Ebitda for the trailing twelve months ended in December 2020 was $7.26 per share and revenue was $33.46 per share over the same period.

The share price has gained 6.66% over the past year to close at $111.50 on Friday, determining a market capitalization of $314.04 billion and a 52-week range of $101.62 to $122.63.

The stock's forward dividend yield of 2.75% is resulting from Friday's closing price and an expected annual cash dividend of $3.066 per common share to be issued on May 27.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $125.99 per share.

Tom Russo (Trades, Portfolio) dominates the group of top fund holders of the company with 0.36% of shares outstanding. His firm is followed by Ken Fisher (Trades, Portfolio) with 0.15% of shares outstanding and Parametric Portfolio Associates LLC with 0.10% of shares outstanding.

Disclosure: I have no positions in any securities mentioned in this article.

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I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands. You can follow me on Twitter at https://twitter.com/AAbaterusso