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A Trio of Stocks Growing Earnings Fast

The 5-year earnings growth rates are beating that of the S&P 500

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Alberto Abaterusso
Jul 08, 2021

Summary

  • The S&P 500 saw its trailing 12-month real earnings per share increase by about 1.73% on average every year over the past 5 years
  • Jefferies Financial Group Inc., KT Corp and Regal Beloit Corp. have beaten the benchmark index for the US market
  • All three of them are good propositions for the next several years, in my opinion
  • Wall Street also likes these names
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The S&P 500 saw its trailing 12-month real earnings per share increase by about 1.73% on average every year over the past five years. The index's share price ($4,298.09 in early trading on Thursday) has grown by more than 100% over the past five years.

Thus, investors may want to consider Jefferies Financial Group Inc. (

JEF, Financial), KT Corp (KT, Financial) and Regal Beloit Corp. (RBC, Financial), since these companies have strongly beaten the S&P 500 in terms of a higher five-year annual earnings per share growth rate over the years observed. All three of them are good propositions for the next several years, in my opinion.

Jefferies Financial Group Inc. (

JEF, Financial)

The New York-based financial conglomerate company with activities in North America and internationally saw its trailing 12-month earnings per share (diluted) jump by 42.8% on average every year over the past five years.

Low or potentially negative interest rates on savings accounts and bonds will boost the demand for allocations to equities, leading to an opportunity for higher margins at Jefferies. The Federal Reserve is determined to keep interest rates low for several years despite inflation, so equities are becoming even more attractive as the only source of signficant returns.

The share price has increased by 92.33% over the past five years to trade at $31.35 in early trading on Thursday for a market capitalization of $8.07 billion, a 52-week range of $14.87 to $34.98 and a price-earnings ratio of 5.82.

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Vanguard Group Inc is the leader in the group of top fund holders with 9.16% of shares outstanding. The investing firm is followed by BlackRock Inc. with 7.45% of shares outstanding and Goldman Sachs Group Inc with 3.58% of shares outstanding.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $39.50 per share.

KT Corp (

KT, Financial)

The South Korean global operator of telecommunication services saw its trailing 12-month earnings per share (diluted) jump by 4.3% on average every year over the past five years.

The company is projected to grow on improved telecommunication infrastructure and the introduction of novel technologies in South Korea.

Following a 4.5% decline over the period of the last five years, the share price has rebound strongly over the past 12 months, gaining more than 40% to trade at $13.87 in early trading on Thursday. The market capitalization is $6.60 billion, the 52-week range is $9.40 to $15.35 and the price-earnings ratio is 9.9.

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Silchester International Investors LLP leads the group of top fund holders with 5.71% of shares outstanding. The asset management firm is followed by Wells Fargo & Company with 2.38% of shares outstanding and Price T Rowe Associates Inc with 1.63% of shares outstanding.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $16.48 per share.

Regal Beloit Corp. (

RBC, Financial)

The Beloit, Wisconsin-based manufacturer and seller of electric engines and power generation and transmission products saw its trailing 12-month earnings per share jump by 7.9% on average every year over the past five years.

This company should benefit from an expected boost to investments in green technologies driven by the need to cut back CO2 emissions by remarkable rates over the next decades.

The share price has increased by nearly 120% over the past five years to trade at $127.81 in early trading on Thursday for a market capitalization of $5.32 billion, a 52-week range of $85.21 to $159.64 and a price-earnings ratio of 25.55.

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Amid the top fund holders of the company, Vanguard Group is the leader with 9.52% of shares outstanding. The asset management firm is followed by FMR LLC with 8.97% of shares outstanding and BlackRock Inc. with 8.64% of shares outstanding.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $167 per share.

Disclosure: I have no positions in any security mentioned.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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