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A Trio of Stocks Beating the S&P 500

These stocks could continue to perform well

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Jan 03, 2022
Summary
  • Brown & Brown, China Longyuan Power Group and MTN Group have outperformed the S&P 500 recently.
  • Wall Street seems positive about these names even after recent gains.
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Shareholders of Brown & Brown Inc. (

BRO, Financial), China Longyuan Power Group Corp. Ltd. (CLPXY, Financial) and MTN Group Ltd. (MTNOY, Financial) saw the value of their shares increase significantly over the past year, outperforming the S&P 500 Index. The benchmark index for the U.S. market stands at 4,766.18 as of Dec. 31, having gained 27% over the past year.

Wall Street sell-side analysts have also issued positive recommendation ratings for these stocks, which indicates their shares prices are expected to continue to improve in the months ahead.

Brown & Brown

Brown & Brown (

BRO, Financial) is a Daytona Beach, Florida-based marketer and seller of insurance products and services in North America, Bermuda, the Cayman Islands and England.

Shares have risen 52% over the past year.

The company paid quarterly dividends in 2021, with the last payment of 10.3 cents per common share issued on Nov. 17. The stock grants a trailing 12-month yield of 0.54%.

In terms of financial strength, GuruFocus has assigned a score of 5 out of 10 to the company, driven by an Altman Z-Score of 3.38 (safe zones and no risk of bankruptcy in two years) and a Piotroski F-Score of 7 (healthy financial situation).

In terms of profitability, GuruFocus has assigned the company a score of 9 out of 10. The best indicators are the operating margin ratio of 27.8% and the return on capital ratio of 211%, which beat the industry medians of 8% and 35%.

The stock was trading at around $70.28 per share at close on Dec. 31 for a market capitalization of $19.85 billion.
The stock has a price-earnings ratio of 34.28, a price-book ratio of 4.83 and a price-sales ratio of 6.6.

On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $68.75 per share.

China Longyuan Power Group

China Longyuan Power Group (

CLPXY, Financial) is a Beijing-based generator of wind and coal power that it distributes in China.

Shares have risen 200% over the past three years through Dec. 31.

The company pays annual dividends with the last distribution of 18.3 cents per common share issued on Aug. 10. The stock grants a trailing 12-month dividend yield of 0.78% as of Dec. 31.

Regarding the financial strength of the company, GuruFocus has assigned a score of 3 out of 10. The Piotroski F-score of 8 out of 9 suggests the company's financial situation is still stable, although there is some sort of financial distress, as indicated by an Altman Z-score of 0.88.

In terms of profitability, GuruFocus has assigned a score of 8 out of 10 to the company. The best indicator is the operating margin ratio of 35.15%, which beats the industry median of 15.82%.

The stock closed at $23.52 per share on Dec. 31 for a market capitalization of $18.90 billion.

The stock has a price-earnings ratio of 20.50, a price-book ratio of 1.98 and a price-sales ratio of 3.78.

On Wall Street, the stock has a median recommendation rating of overweight and an average price target of approximately $17.74 per share.

MTN Group

MTN Group (

MTNOY, Financial), a Johannesburg, South Africa-based telecommunication services operator providing infrastructure for landline, mobile phones and internet and several related services. The company operates globally across more than 20 national markets with 280 million subscribers in total.

Shares have increased 160% over the past year through Dec. 31.

In March 2021, MTN Group suspended the payment of semi-annual dividends due to many uncertainties, including issues with upstream liquidity in Nigeria, timing issues with the company's asset realization plan in addition to the impact of the Covid-19 virus. The executives thus prefer to prioritize the debt reduction target. The last semi-annual dividend of 18.8 cents per common share was paid on April 16, 2020.

In terms of financial strength, GuruFocus has assigned a score of 4 out of 10. The Piotroski F-score is 9 out of 9, indicating the current financial situation is typical of a stable company even though the Altman Z-score of 1.98 points to gray areas that indicate some sort of financial distress.

In terms of profitability, GuruFocus has assigned a score of 8 out of 10 to the company. The three-year earnings per share with non-recurring items growth rate is 57.2% (versus the industry median of 4.2%). As a result, the company is likely to get its dividend back, though it's hard to predict when.

The stock was trading at $10.655 per share at close on Dec. 31 for a market capitalization of $19.17 billion.

The stock has a price-earnings ratio of 41.54, a price-book ratio of 2.87 and a price-sales ratio of 1.72.

On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $10.70 per share.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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