Investors may want to consider the three stocks listed below, as they are growing earnings faster than sales, which may indicate efficient operating activities as profit margins increase with growth.
The following companies have five-year revenue growth rates of no less than 5% per year and five-year net income growth rates of no less than 10% per year.
Lululemon Athletica
The first stock value investors may want to consider is Lululemon Athletica Inc. (LULU, Financial). Based in Vancouver, Canada, the company operates 521 apparel stores in North America and internationally for the sale of pants, shorts, tops, jackets and fitness-related accessories for healthy lifestyle and athletic activities. Under the Lululemon brand, the goods are also offered directly to consumers through the Lululemon.com e-commerce website and mobile apps.
The company saw its trailing 12-month revenue grow by 17.4% and its trailing 12-month net income grow by 21.7%, both on average, per annum over the last five years.
The stock traded at around $347.57 per share at close on Friday for a market cap of $47.05 billion and a 52-week range of $269.28 to $399.89. Currently, Lululemon Athletica does not pay dividends.
GuruFocus assigned a financial strength rating of 6 out of 10 and a profitability rating of 9 out of 10 to the company.
Wall Street sell-side analysts issued a median recommendation rating of overweight for this stock and have established an average target price of $388.50 per share.
Agilent Technologies
The second stock investors may want to consider is Agilent Technologies Inc. (A, Financial). Based in Santa Clara, California, the company provides diagnostics and research organizations with application solutions, including liquid and gas chromatography systems, arrays for DNA investigations and various laboratory instruments.
The company saw its trailing 12-month revenue grow by 6.2% and its trailing 12-month net income grow by 14.3% on average annually over the last five years.
The stock was trading at around $145.01 per share at close on Friday for a market cap of $44 billion and a 52-week range of $84.8 to $147.68.
Currently, the company pays a quarterly cash dividend of 19.4 cents per share with the next one scheduled for July 28, leading to a forward dividend yield of 0.53% as of June 18.
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 overweight for this stock and have established an average target price of $146.18 per share.
Centene
The third stock value investors may want to consider is Centene (CNC, Financial), a St. Louis-based provider of multinational health care plans and services to under-insured and uninsured U.S. individuals.
The company saw its trailing 12-month revenue grow by 33% and its trailing 12-month net income grow by 36.1%, on average, every year over the last five years.
The stock traded at around $71.69 per share at close on Friday for a market capitalization of $41.78 billion and a 52-week range of $53.6 to $75.25. Currently, Centene does not pay dividends.
GuruFocus assigned the company a score of 6 out of 10 for its financial strength rating and 7 out of 10 for its profitability rating.
Wall Street sell-side analysts recommend a median rating of buy for this stock and have established an average target price of $85.25 per share.
