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3 Stocks Growing Earnings Faster Than Sales

These companies have efficient operating activities

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Nov 07, 2021
Summary
  • Akamai Technologies, Quanta Services and MarketAxess Holdings are increasing their profit margins.
  • There is an indication that their operating activities are very efficient.
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Investors may want to consider the following stocks since they are growing earnings faster than sales, which may indicate efficient operating activities as profit margins expand along 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.

Akamai Technologies

The first stock value investors may want to consider is Akamai Technologies Inc. (

AKAM, Financial), a Cambridge, Massachusetts-based provider of cloud services for U.S. and international businesses that operate on the internet.

On average, the company saw its trailing 12-month revenue increase by 7.7% and its trailing 12-month net income increase by 12.9% every year over the last five years.

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The stock closed at around $107.29 per share on Friday for a market cap of $17.38 billion and a 52-week range of $92.64 to $124.91.

Akamai Technologies 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 $132.77 per share.

Quanta Services

The second stock investors may want to consider is Quanta Services Inc. (

PWR, Financial), a Houston-based provider of infrastructure services for the electric, industrial, communications and pipeline industries.

On average, the company saw its trailing 12-month revenue increase by 10.5% and its trailing 12-month net income increase by 11.6% every year over the last five years.

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The stock closed at around $117.42 per share on Friday for a market cap of $16.73 billion and a 52-week range of $64.1 to $122.95.

Currently, Quanta Services pays quarterly dividends. On Oct. 15, it paid 6 cents per common share, which was on par with the previous payment.

GuruFocus assigned a score of 6 out of 10 to the company's financial strength and an 8 out of 10 rating to its profitability.

Wall Street sell-side analysts issued a median recommendation rating of buy for this stock and have established an average target price of $133.56 per share.

MarketAxess Holdings

The third stock value investors may want to consider is MarketAxess Holdings Inc. (

MKTX, Financial), a New York-based electronic trading platform for institutional investors and broker-dealer firms worldwide.

The company saw its trailing 12-month revenue increase by 16% and its trailing 12-month net income increase by 23.2%, on average, every year over the last five years.

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The stock closed at around $388.31 per share on Friday for a market capitalization of $14.77 billion and a 52-week range of $385.04 to $606.45.

Currently, MarketAxess Holdings pays a quarterly dividend of 66 cents per common share with the next payment scheduled for Nov. 17, leading to a forward dividend yield of 0.68% as of Nov. 5.

GuruFocus assigned the company a score of 8 out of 10 for its financial strength rating and 9 out of 10 for its profitability rating.

Wall Street sell-side analysts issued a median recommendation rating of hold for this stock and have established an average target price of $435.78 per share.

Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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