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3 Stocks With Fast-Growing Earnings

Rising earnings push share prices higher.

The S&P 500 Index has grown its annual earnings per share (not adjusted to the inflation) by 41% over the past fivr years (about an 8.2% increase every year), pushing the share price up 53% to $3,168.80 at close on Friday.

While past performance is not a guarantee of future results, if you choose companies that have reported more than 41% growth in their annual earnings per share, topping the S&P 500 over the observed period, your search may uncover good performers.


This search considers earnings per share without non-recurring items which, excluding the impact from one-time entries such as infrequent or unexpected gains or losses in the income statement of the company, gives us a reliable estimate of future earnings growth.

Nvidia

The first result of my search is Nvidia Corp. (NASDAQ:NVDA).

The U.S. global semiconductor company has grown its trailing 12-month earnings per share without non-recurring items by nearly 59% over the past five years, as shown in the chart below. Over the same period, Nvidia's shares climbed 1,044.56% to trade around $223.99 at close on Friday, topping the S&P 500 by an impressive 945%.

Nvidia has a market capitalization of $137.08 billion, a price-earnings ratio of 57.29 versus the industry median of 22.29 and a price-sales ratio of 13.82 versus the industry median of 1.69.

Wall Street issued an overweight recommendation rating for the stock and set an average target price of $232.68.

Essent Group

Essent Group Ltd. (NYSE:ESNT) is the second result of this search.

The Bermuda-based provider of U.S. residential properties-backed private mortgage insurance and reinsurance has grown its trailing 12-month earnings per share without non-recurring items by 49.2% over the past five years, as illustrated in the chart below. Over the same period, the share price rose 122.4%, beating the S&P 500 index by 60%. The stock closed at $53.25 per share on Friday.

The stock has a market capitalization of approximately $5.24 billion, a price-earnings ratio of 9.73 versus the industry median of 11.77 and a price-sales ratio of 6.28 compared to the industry median of 2.9.

Wall Street issued an overweight recommendation rating for the stock and established an average target price of $60.14.

Consolidated-Tomoka Land

The third stock is Consolidated-Tomoka Land Co. (CTO).

The Florida-based real estate company has increased its trailing 12-month earnings per share without non-recurring items by 78.5% over the past five years, as illustrated in the chart below, pushing the share price up nearly 22% to $62.99 at close on Friday.

The share price growth wasn't enough for Consolidated-Tomoka Land to beat the S&P 500 index. However, looking ahead, Wall Street sees the stock outperforming the U.S. market within 12 months as its sell-side analysts' board issued an overweight recommendation rating with an average target price of $82. This suggests analysts have a high consideration for Consolidated-Tomoka's past profitability.

Consolidated-Tomoka Land has a market capitalization of $310.48 million, a price-earnings ratio of 10.8 that matches the industry median and a price-sales ratio of 4.26, which is above the industry median of 2.56.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.