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5 Good Companies With High Profitability

Stocks that have high financial strength and strong margin growth

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James Li
Sep 17, 2021

Summary

  • GuruFocus’ “Good Companies” screen looks for companies with high profitability potential.
  • The screener listed several companies that also have high financial strength.
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According to the “Good Companies Screen,” one of several Premium screens under the All-in-One Screener, five stocks with high financial strength and profitability are Edwards Lifesciences Corp. (

EW, Financial), Lululemon Athletica Inc. (LULU, Financial), Masimo Corp. (MASI, Financial), Graco Inc. (GGG, Financial) and Usana Health Sciences Inc. (USNA, Financial).

GuruFocus’ “Good Companies” screen looks for companies that have strong profitability measures, which include high operating margin growth, 10 years of positive income over the past 10 years and solid revenue and earnings growth over the same period.

Edwards Lifesciences

Edwards Lifesciences (

EW, Financial) designs and markets a wide range of medical devices for advanced stages of structural heart disease. GuruFocus ranks the Irvine, California-based company’s profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that has increased approximately 2.8% per year on average over the past five years and is outperforming more than 90% of global competitors.

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Edwards Lifesciences’ financial strength ranks 8 out of 10 on the back of a strong Altman Z-score of 20 and interest coverage ratios that outperform more than 68% of global medical device companies.

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Gurus with large holdings in Edwards Lifesciences include

Frank Sands (Trades, Portfolio)’ Sands Capital Management, the Vanguard Health Care Fund (Trades, Portfolio) and Ken Fisher (Trades, Portfolio)’s Fisher Investments.

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Lululemon Athletica

Lululemon Athletica (

LULU, Financial) designs and distributes athletic apparel for men and women. GuruFocus ranks the Vancouver-based company’s profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, a high Piotroski F-score of 9 and an operating margin that has increased approximately 3.4% per year on average over the past five years and outperforms more than 94% of global competitors.

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Masimo

Masimo (

MASI, Financial) designs medical devices for noninvasive patient monitoring. GuruFocus ranks the Irvine, California-based company’s profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased approximately 5.20% per year on average over the past five years and outperforms more than 80% of global competitors.

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Graco

Graco (

GGG, Financial) manufactures equipment used for managing fluids, coatings and adhesives. GuruFocus ranks the Minneapolis-based company’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that has increased approximately 2.3% per year over the past five years and outperforms more than 96% of global competitors.

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Usana Health Sciences

Usana Health Sciences (

USNA, Financial) develops and sells science-based nutritional and personal care products. GuruFocus ranks the Salt Lake City-based company’s financial strength and profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 8, a strong Altman Z-score of 10 and an operating margin that has increased approximately 0.8% per year on average over the past five years and is outperforming more than 84% of global competitors.

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Disclosures

I am/we are Long USNA
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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