A Trio of Stocks Beating the S&P 500

These stocks could continue to perform well

Author's Avatar
Mar 11, 2022
Summary
  • Mr. Cooper Group, Denbury and Broadstone Net Lease have outperformed the S&P 500 recently.
  • Wall Street seems positive about these names even after recent gains.
Article's Main Image

Shareholders of Mr. Cooper Group Inc. (

COOP, Financial), Denbury Inc. (DEN, Financial) and Broadstone Net Lease Inc. (BNL, 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 4,259.52 as of March 10, having gained 9.5% 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.

Mr. Cooper Group

Mr. Cooper Group (

COOP, Financial) is a Coppell, Texas-based financial services company focusing on mortgages.

Shares have risen 33.6% over the past year. The stock was trading around $47.59 per share at close on Thursday for a market capitalization of $3.52 billion. The stock has a price-book ratio of 1.04.

1502337230927110144.png

Mr. Cooper Group does not pay dividends.

In terms of financial strength, GuruFocus has assigned a score of 4 out of 10 to the company. The Altman Z-score of 1.24 suggests some sort of financial distress, so the risk of bankruptcy cannot be ruled out. However, Mr. Cooper Group's return on invested capital of 7.61% (calculated using trailing 12-month income statement data) exceeds its weighted average cost of capital of 5.6%, meaning the investment returns more than it costs to raise the capital required for that investment. If this company continues to generate a positive excess return on new investments going forward, its value should increase as growth progresses.

In terms of profitability, GuruFocus gave the company a score of 6 out of 10, driven by a return on equityof 46.07% versus the industry median of 9.84%.

On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $59.14 per share.

Denbury

Denbury Inc. (

DEN, Financial) is a Plano, Texas-based independent oil equivalent producer that owns 192 million oil-equivalent barrels of estimated proven oil and natural gas reserves in the Gulf Coast and Rocky Mountain regions.

Shares have risen 60.88% over the past three years through March 10. The stock closed at $73.33 per share on Thursday for a market capitalization of $3.52 billion. The stock has an enterprise value-to-Ebitda ratio of 0.47.

1502337233603076096.png

Denbury does not pay dividends.

Regarding the financial strength of the company, GuruFocus has assigned a score of 6 out of 10.

The Altman Z-score of 0.63 suggests financial distress, so the risk of bankruptcy cannot be ruled out. However, Denbury’s ROIC of 23.60% exceeds its WACC of 7.75%, meaning the investment returns more than it costs to raise the capital required for that investment. If this company continues to generate a positive excess return on new investments going forward, its value should increase as growth progresses.

In terms of profitability, GuruFocus has assigned a score of 8 out of 10 to the company, which is driven by a three-year revenue per share growth rate of 98.25% versus the industry median of -3.8%.

On Wall Street, the stock has a median recommendation rating of buy and an average price target of approximately $102.28 per share.

Broadstone Net Lease

Broadstone Net Lease (

BNL, Financial) is a real estate investment company based in Rochester, New York, managing a portfolio of 627 properties across North America. These assets are for a variety of industrial purposes and their aggregate gross value is $4 billion.

Shares have risen by 17% over the past year through March 10. The stock closed at $21.25 per share on Thursday for a market capitalization of $3.50 billion. The stock has a price-book ratio of 1.36.

1502337236987879424.png

The company pays quarterly dividends, with the next distribution of 26.5 cents per common share to be issued on April 15. The stock grants a forward dividend yield of 4.94% as of March 10.

In terms of financial strength, GuruFocus has assigned a score of 4 out of 10. The Altman Z-score of 1.24 suggests some sort of financial distress, so the risk that the company could also fail cannot be ruled out. However, based on the interest coverage ratio of 3.05, it appears the company can still easily pay the interest expense on its debt.

In terms of profitability, GuruFocus has assigned a score of 8 out of 10 to the company, which is driven by a three-year revenue per share growth rate of 14.6% versus the industry median of -0.2%.

On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $26.88 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
Rating:
0 / 5 (0 votes)
Author's Avatar
WRITTEN BY

GuruFocus Screeners

Related Articles