A Trio of Stocks Growing Earnings Fast
Growing earnings can often push share prices up. The S&P 500 Index, which is a benchmark for the U.S. market, has grown its annual earnings per share (not adjusted for inflation) by about 6.5% every year over the past five years. On the tailwind of this, the share price of the index increased by nearly 49% over the past five years, closing at a price of $3,003.37 on March 3, 2020.
Past performance is not a guarantee of future results, but it does indicate that a company has a better foundation on which to grow.
As a result of strong past results, Wall Street sell-side analysts have released bullish recommendation ratings for Novo Nordisk A/S (NYSE:NVO), Booz Allen Hamilton Holding Corp (NYSE:BAH) and Otter Tail Corp (NASDAQ:OTTR).
Novo Nordisk
The Danish biotechnology company has grown its trailing 12-month earnings per share without non-recurring items by nearly 8% every year over the past five full fiscal years. As a result, the share price ($61.50 as of March 3) has risen by 35% over the past five years.
The stock has a market capitalization of $144.40 billion, a price-earnings ratio of 25.6 versus the industry median of 33.9 and a price-sales ratio of 8.17 versus the industry median of 10.39.
Wall Street recommends an overweight rating for shares of Novo Nordisk with an average price target of $64.49 per share.
GuruFocus assigned a high rating of 8 out of 10 for the company's financial strength and the highest rating of 10 out of 10 for its profitability.
Booz Allen Hamilton Holding Corp
Booz Allen Hamilton is a McLean, Northern Virginia-based provider of management and technology consulting, engineering and cyber solutions to U.S. and international entities.
The chart below shows that it has grown its trailing 12-month earnings per share without non-recurring items by nearly 12% every year over the past five full fiscal years, producing a 155% increase in the share price ($74.62 as of March 3).
The stock has a market capitalization of $10.46 billion, a price-earnings ratio of 24.39 versus the industry median of 15.65 and a price-sales ratio of 1.45 versus the industry median of 0.93.
Wall Street recommends an overweight rating for shares of Booz Allen Hamilton Holding Corp and has set a price target of $85.15 per share.
GuruFocus assigned the company a positive financial strength rating of 6 out of 10 and a high profitability rating of 8 out of 10.
Otter Tail Corp
The chart below shows that the Fergus Falls, Minnesota-based regional electric company has grown its trailing 12-month earnings per share without non-recurring items by 7.8% every year over the past five full fiscal years. On the tailwind of this, the share price ($49.45 as of March 3) increased by nearly 56%.
The stock has a market capitalization of $2.02 billion, a price-earnings ratio of 23.08 versus the industry median of 16.35 and a price-sales ratio of 2.19 versus the industry median of 1.38.
Wall Street recommends an overweight rating for shares of Otter Tail Corp and has established an average price target of $57 per share.
GuruFocus assigned a moderate rating of 4 out of 10 for the company's financial strength and a positive rating of 6 out of 10 for its profitability.
Disclosure: I have no positions in any securities mentioned in this article.
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This article first appeared on GuruFocus.
