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Alberto Abaterusso
Alberto Abaterusso
Articles (1701) 

3 High-Performing Large-Cap Stocks

Garmin tops the list

March 28, 2019 | About:

These large-cap companies have had positive performances on the stock market over the past week, month, year and three years.

Further, these stocks have a moderate to high financial strength rating, which is mainly the result of a low total debt-to-equity ratio and a current ratio of at least 1.25.

Garmin Ltd. (NASDAQ:GRMN), the Swiss global distributor of navigation, communication and information devices, has increased 1.5% over the last week, 1.4% over the past month, 35.6% so far this year, 45.8% over the last 52 weeks and 117.5% over the past three years through March 27.

The company has paid dividends since 2003. On March 31, Garmin will distribute a quarterly dividend of 57 cents per ordinary share to shareholders of record as of March 16.

Based on the closing share price on March 27, the distribution leads to a forward dividend yield of 2.68%, topping the S&P 500 Index’s dividend yield of 1.92%.

The company has a total debt-to-equity of zero versus the industry median of 85.44 and a current ratio of 2.48 versus the industry median of 1.64.

As of Dec. 29, Garmin’s balance sheet had $1.4 billion in cash on hand and short-term securities. In 2018, the company produced almost $920 million in cash flow from operations, of which 67.5% was levered free cash flow.

The stock closed at $85.89 per share on Wednesday for a market capitalization of $16.27 billion. According to GuruFocus, the stock has a price-earnings ratio of 23.53, a price-book ratio of 3.9 and a price-sales ratio of 4.9.

The Peter Lynch chart suggests the stock is overvalued.

Wall Street released a hold recommendation rating on shares of Garmin with an average target price of $77.6 per share.

Wheaton Precious Metals Corp. (NYSE:WPM), a Canadian precious metals streaming company,  has gained 3.9% over the last week, 17.5% over the past month, 28.6% year to date, 23.3% over the last 52 weeks and 41.2% over the past three years through March 27.

On April 18, Wheaton will pay a quarterly dividend of 9 cents per share to shareholders of record as of April 5. The ex-dividend date is scheduled for April 4.

The distribution leads to a forward dividend yield of 1.43% compared to the industry median of 3.14% and the S&P 500’s yield of 1.92%.

The stock was trading around $25.11 per share on Wednesday for a market capitalization of $11.19 billion. The stock has a price-book ratio of 2.15 versus an industry median of 1.62 and an enterprise value-to-earnings before interest, taxes, depreciation and amortization ratio of 17.19 versus an industry median of 8.71.

Wheaton Precious Metals has a good financial strength rating of 6 out of 10, supported by a low debt-to-equity ratio of 24% versus the industry median of 34% and a current ratio of 2.76 compared to an industry median of 2.29.

The company also has a high profitability and growth rating of 7 out of 10, which is the result on an EBITDA margin of 92.4% versus the industry median of 24%.

The Peter Lynch chart suggests the stock is overpriced.

Wall Street issued a buy recommendation rating with a price target of $28.55 per share of Wheaton.

RWE AG (RWEOY), a German distributor of power and gas, has gained 2.7% over the last week, 9% over the past month, 23.8% year to date, 8.7% over the last 12 months and 121% over the past three years through March 27.

RWE paid dividends continuously for 13 years through 2015. It reinstated the distribution in 2018, when the company paid an annual dividend of 1.5 euros ($1.79) per share, including a special payment of one euro for shareholders to benefit from the refund of the nuclear tax.

On May 3, both the supervisory and executive board of RWE will propose to the shareholders at the annual general meeting an annual dividend of 0.70 euros per common share, up 40% from the 2018 payment.

Based on the closing share price on Wednesday, the annual distribution will lead to a forward dividend yield of nearly 3% compared to the industry median of 3.53% and the S&P 500’s yield of 1.92%.

Shares of RWE were trading around $26.97 per share on Wednesday for a market capitalization of $16.59 billion.

The German company has a total debt-to-equity ratio of 17% compared to the industry median of 93% and a current ratio of 1.34 versus the industry median of 1.07.

The stock has a price-book ratio of 1.54 compared to an industry median of 1.52 and an enterprise value-to-EBITDA ratio of 4.72 versus the industry median of 10.53.

RWE delivered an EBITDA margin of 14.2% of total revenues in 2018, missing the industry median by 9.6 percentage points.

The Peter Lynch chart suggests the stock may be trading near its fair value. 

Wall Street issued an overweight recommendation rating on shares of RWE, which means analysts expect the stock to outperform either the industry or the overall market over the next 52 weeks. The average target price is $27.29 per share.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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