Shares of Apple Inc. (AAPL, Financial), Microsoft Corp. (MSFT, Financial) and Walmart Inc. (WMT, Financial) have performed well so far this year and over the past several years, beating the overall U.S. stock market in each of the three observed periods.
The S&P 500 index, which is the benchmark for U.S.-listed stocks, rose by 24% year to date, by 19% in the past 52 weeks and by 38% in the last three years through Dec. 6.
Shareholders can expect these large caps will keep on trading higher as their main catalyst for share price, profitable operations, will most likely continue to grow for the next several years.
GuruFocus has given these three companies a profitability score of at least 8 out of 10. Moreover, Wall Street sell-side analysts have released buy recommendations for these stocks.
Apple
Shares of Apple have gained 71.6% so far this year, 59.6% over the last 52 weeks and 137.6% over the past three years through Dec. 6, topping the S&P 500 by 47.22%, 38.4% and 99.6%, respectively.
The Cupertino, California-based developer and seller of consumer electronics and computer software paid quarterly dividends over the observed periods. The last quarterly dividend of 77 cents per common share was paid to shareholders on Nov. 14, generating a 1.12% trailing 12-month dividend yield based on Friday’s closing price of $270.71. The stock has a market capitalization of $1.20 trillion.
GuruFocus assigned a positive rating of 6 out of 10 for the company's financial strength and the top rating of 10 out of 10 for its profitability.
With regards to profitability, Apple has a net profit margin of 21.24% versus the industry median of 2.76%. The company’s net margin is ranked higher than 2,163 out of a total of 2,263 companies operating in the consumer electronics industry.
The stock has a price-earnings ratio of 22.85, a price-sales ratio of 4.86 and a price-book ratio of 13.3. These ratios, along with below Peter Lynch chart, indicate that Apple is not cheap.
Sell-side analysts issued an overweight recommendation rating for shares of Apple with an average target price of $260.98 per unit.
Microsoft
Shares of Microsoft have gained 49.4% year to date, 41% over the last 52 weeks and 144.9% over the past three years through Dec. 6, topping the S&P 500 by 24.7%, 21.8% and 106.9%, respectively.
The Redmond, Washington-based developer, manufacturer, licensor and seller of computer software, personal computers and consumer electronics also paid quarterly dividends over the observed periods. On Sept. 12, Microsoft paid a 46 cents quarterly cash dividend per common share to its shareholders, which produces a trailing 12-month dividend yield of 1.25% based on Friday’s closing share price of $151.75 for a market cap of $1.16 trillion. On Dec. 12, the tech giant will pay a 51 cents quarterly cash dividend per common share, reflecting a 10.87% hike from the previous payment.
GuruFocus rated the company's financial strength with a positive score of 6 out of 10 and its profitability with the top score of 10 out of 10.
Microsoft has a net profit margin of 31.66%, which is far above the industry median of 2.57%. The company's net profit margin is ranked higher than 2,022 out of a total of 2,089 competitors operating in the software industry.
The stock has a price-earnings ratio of 28.57, a price-sales ratio of 9.06 and a price-book ratio of 10.93. These ratios, together with the Peter Lynch chart, suggest that the stock is not cheap.
Wall Street sell-side analysts recommend a buy rating for shares of Microsoft with an average target price of $161.72 per unit.
Walmart
Shares of Walmart have climbed 28.6% year to date, 27.5% over the last 52 weeks and 70.92% over the past three years through Dec. 6, topping the S&P 500 by 4.1%, 9.3% and 32.9%, respectively.
The Bentonville, Arkansas-based operator of hypermarkets, discount department and grocery stores paid quarterly dividends over the periods in question.
On Sept. 3, Walmart paid a 53 cents quarterly cash dividend per common share to its shareholders, which produces a trailing 12-month dividend yield of 1.77% based on the share price of $119.78 at close on Friday for a market cap of $339.84 billion. The company will distribute the same amount per common share on Jan. 2, 2020.
GuruFocus assigned a positive rating of 5 out of 10 for the company's financial strength and a very high 8 out of 10 rating for its profitability.
The company has a net profit margin of 2.77%, beating the industry median of 1.51%. The company's net profit margin is ranked higher than 191 out of a total of 277 competitors that operate in the discount stores industry.
The stock has a price-earnings ratio of 23.9, a price-sales ratio of 0.66 and a price-book ratio of 4.76. These ratios, along with the Peter Lynch chart, indicate that the share price of Walmart is not trading cheaply.
Wall Street sell-side analysts issued an overweight recommendation rating for shares of Walmart with an average target price of $130.24 per unit.
Disclosure: I have no positions in any securities mentioned.
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