These large basic materials companies have had positive performance on the stock market over the past week, month, year and three years.
These stocks have moderate-to-high financial strength ratings, which mainly results from debt-equity ratios of less than 100% and from return on invested capital ratios topping the weighted average cost of capital ratio by at least 390 basis points.
Further, the following stocks are foreseen to outperform at least their industry within 52 weeks, with Wall Street issuing an overweight recommendation rating on each of them.
Air Products and Chemicals Inc. (APD, Financial), an Allentown, Pennsylvania-based global distributor of atmospheric and specialty gases, and related services, has increased 0.2% over the last week, 4.6% over the past month, 21% so far this year, 18.8% over the last 52 weeks and 34% over the past three years through April 11.
The company has paid dividends since 1983. On May 13, Air Products and Chemicals will distribute a quarterly dividend of $1.16 per ordinary share to shareholders of record no later than April 1.
Based on the closing share price on April 11, the distribution leads to a forward dividend yield of 2.4%, topping the S&P 500 Index’s dividend yield of 1.86%.
The company has a financial strength rating of 7 out of 10 and a profitability and growth rating of 5 out of 10. The debt-equity ratio of 35% is below the industry median of 39%. The return on invested capital of 14.2% beats the weighted average cost of capital by 815 basis points.
The stock closed at $193.55 per share on Thursday for a market capitalization of $42.51 billion. According to GuruFocus, the stock has a price-earnings ratio of 25.27, a price-book ratio of 3.91 and a price-sales ratio of 4.78.
The Peter Lynch chart suggests the stock is not trading cheaply.
Wall Street released an average target price of $193.40 per share, or 0.08% lower than the closing share price on Thursday.
Parker-Hannifin Corp. (PH, Financial), a Cleveland, Ohio-based distributor of motion and control technologies for various mobile, industrial and aerospace markets, has gained 1.4% over the last week, 7.7% over the past month, 24.6% year to date, 7.8% over the last 52 weeks and 65.6% over the past three years through April 11.
The company has paid a dividend since 1985. Currently, Parker-Hannifin Corp. pays a 76-cent cash quarterly dividend per common share leading to a forward dividend yield of 1.66% versus the industry median of 2.2% and the S&P 500 index yield of 1.86% as of Thursday.
Parker-Hannifin Corp. has a financial strength rating of 6 out of 10 and a high profitability and growth rating of 8 out of 10. The debt-equity ratio is 94% but above the industry median of 39%. The return on invested capital of 14.93% tops the weighted average cost of capital of 11% by 393 basis points.
The stock was trading around $185.87 per share on Thursday for a market capitalization of $24.05 billion. The stock has a price-earnings ratio of 17.75, a price-book ratio of 4.14 and a price-sales ratio of 1.72.
According to the Peter Lynch chart, the stock may be overpriced.
Wall Street issued a price target of $183.48 per share of Parker-Hannifin Corp., which is 1.3% lower than the share price at close on Thursday.
Koninklijke DSM NV ADR (RDSMY, Financial), a Dutch company engaged in nutrition, health and materials businesses worldwide, has gained 1.1% over the last week, 4.4% over the past month, 41.2% year to date, 8.4% over the last 12 months and 98% over the past three years through April 11.
Koninklijke has paid dividends since 2001. The company paid a 59-cent cash quarterly dividend per common share in 2018. If held constant throughout 2019 as well, the payment leads to a forward dividend yield of 2.09% versus the industry median of 2.05% and the S&P 500 index yield of 1.86% as of Thursday.
The Dutch, science-based multinational company has a rating of 7 out of 10 for financial strength and for profitability and growth. The debt-equity ratio is 34% versus the industry median of 39%. The return on invested capital of 17.76% outperforms the weighted average cost of capital of 7.08% by 568 basis points.
Shares of Koninklijke were trading around $28.6 per share on Thursday for a market capitalization of $20.09 billion. The stock has a price-earnings ratio of 16.71, a price-book ratio of 2.29 and a price-sales ratio of 1.92.
The Peter Lynch chart suggests the stock may be slightly overvalued.
Wall Street issued an average target price is $28.27 per share, reflecting a 1.15% decrease from the closing share price on Thursday.
Disclosure: I have no positions in any securities mentioned.
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