For Immediate Release
Chicago, IL – January 8, 2019 – Stocks in this week’s article include: BJ's Restaurants, Inc. BJRI, O'Reilly Automotive, Inc. ORLY, Amedisys, Inc. AMED, HCA Healthcare, Inc. HCA and Toyota Motor Corp. TM. Kevin Matras screens for companies showing their 'first' profit and explains why they are ones to watch.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
Here Are 5 Stocks with Amazing Interest Coverage Ratios
You can simply arrive at a decision to Buy or Sell a particular stock by looking at its sales and earnings numbers. But such a strategy does not always warrant superior returns. A critical analysis of the company’s financial background is always required for a better investment decision.
A company’s fundamentals should be sound enough to meet its financial obligations. This can be judged with coverage ratios — the higher these are the more efficient an enterprise will be in meeting its financial obligations. Here we have discussed one such ratio — the Interest Coverage Ratio.
Interest Coverage Ratio = Earnings before Interest & Taxes (EBIT) divided by Interest Expense.
Why Interest Coverage Ratio?
Interest Coverage Ratio is used to determine how effectively a company can pay the interest charged on its debt.
Debt, which is crucial for most of the companies to finance operations, comes at a cost called interest. Interest expense has a direct bearing on the profitability of a company and the company’s creditworthiness depends on how effectively it meets its interest obligations. Therefore, Interest Coverage Ratio is one of the important criteria to factor in before making any investment decision.
Interest Coverage Ratio suggests the number of times the interest could be paid from earnings and also gauges the margin of safety a firm carries for paying interest.
An interest coverage ratio lower than 1.0 implies that the company is unable to fulfill its interest obligations and could default on repaying debt. A company that is capable of generating earnings well above its interest expense can withstand financial hardship. Definitely, one should also track the company’s past performance to determine whether the interest coverage ratio has improved or worsened over a period of time.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/345954/here-are-5-stocks-with-amazing-interest-coverage-ratio
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About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year.
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Toyota Motor Corporation (TM) : Free Stock Analysis Report
O'Reilly Automotive, Inc. (ORLY) : Free Stock Analysis Report
HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
Amedisys, Inc. (AMED) : Free Stock Analysis Report
BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report
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