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3 Profitable Businesses With Solid Financial Conditions

These companies have good ratings for financial strength and profitability

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Jan 21, 2022
Summary
  • Kirkland Lake Gold Ltd, Logitech International SA and Masimo Corporation run profitable businesses with strong balance sheets.
  • Wall Street likes these business and has issued positive ratings for them.
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When screening the market for value opportunities, investors may want to consider stocks that represent companies with high profitability and robust financial conditions. These qualities are represented by GuruFocus profitability and financial strength ratings of at least 6 out of 10.

The companies below meet the above criteria. Furthermore, sell-side analysts on Wall Street have recommended positive ratings for them.

Kirkland Lake Gold Ltd

The first stock that makes the cut is Kirkland Lake Gold Ltd (

KL, Financial), a Canadian gold mining company holding mineral assets in Canada and Australia.

GuruFocus rated its financial strength 7 out of 10, driven by an Altman Z-Score of 4.93 and Piotroski F-Score of 6, which indicates the company is not in danger of bankruptcy and financial conditions are good.

GuruFocus rated its profitability 8 out of 10, driven by an operating margin ratio of 50.37% versus the industry median of 6.26%.

The share price ($41.29 as of Jan. 20) has risen by 2.8% over the past year for a market capitalization of $10.90 billion, a price-earnings ratio of 12.42 and a price-book ratio of 2.04.

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The price-sales ratio is 4.3 and the 52-week range is $31.72 to $46.98.

On Wall Street, the stock has a median recommendation rating of hold with an average target price of $45.44 per share.

Logitech International SA

The second stock that qualifies is Logitech International SA (

LOGI, Financial), a Swiss designer and producer of a variety of consumer electronics products for computing, gaming, music, video and other digital platforms.

GuruFocus rated its financial strength 7 out of 10, driven by an Altman Z-Score of 8.84 and a Piotroski F-Score of 8, which are indicating that the company has a solid balance sheet.

GuruFocus rated its profitability 8 out of 10, driven by a return on capital ratio of 559.46% (versus the industry median of 8.29%), a three-year Ebitda per share growth rate of 61.8% (versus the industry median of 6.85%) and a three-year earnings per share without non-recurring items growth rate of 63.8% (versus the industry median of 7.1%).

The share price ($78.10 as of Jan. 20) has fallen by 25% over the past year for a market capitalization of $13.66 billion, a price-earnings ratio of 14.55 and a price-book ratio of 5.75.

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The price-sales ratio is 2.32 and the 52-week range is $76.70 to $140.17.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of approximately $105.61 per share.

Masimo Corporation

The third stock that qualifies is Masimo Corporation (

MASI, Financial), an Irvine, California-based developer of disease monitoring non-invasive technologies and automation solutions for hospitals and healthcare facilities around the world.

GuruFocus rated its financial strength 8 out of 10, driven by an Altman Z-Score of 27.76, which suggests that the balance sheet of the company is solid. Also, the interest coverage ratio of 758.81 tells that the company can easily pay the interest expense on any debt outstanding.

The company's profitability rating scored 9 out of 10, driven by a net profit margin ratio of 19.23% (versus the industry median of 1.9%) and a return on capital ratio of 51.98% (versus the industry median of 1.2%).

The share price ($221.66 as of Jan. 20) has dropped by 16% over the past year for a market capitalization of $12.24 billion, a price-earnings ratio of 55.29 and a price-book ratio of 8.35.

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The price-sales ratio is 10.59 and the 52-week range is $205.10 to $305.21.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $320.75 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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