For Immediate Release
Chicago, IL – March 28, 2022 – Stocks in this week’s article are CBRE Group, Inc. CBRE, Tecnoglass Inc. TGLS, Dillard's, Inc. DDS and Boyd Gaming Corp. BYD.
Scoop Up These 4 Promising Interest-Coverage-Ratio Stocks
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 when the market is coping with conflicting headlines on inflation, supply chain issues and tensions between Russia and Ukraine.
Meanwhile, the Federal Reserve raised the benchmark interest rate by 25 basis points in order to tame shooting commodity prices. At the current juncture, investors should gauge the changing market dynamics and accordingly chalk out their investment strategy. 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 called the interest coverage ratio.
Interest Coverage Ratio = Earnings before Interest & Taxes (EBIT) divided by Interest Expense.
Why Interest Coverage Ratio?
The 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 companies to finance operations, comes at a cost called interest. Interest expense has a direct bearing on the profits of a company. The company's creditworthiness depends on how effectively it meets its interest obligations. Therefore, the interest coverage ratio is one of the important criteria to factor in before making any investment decision.
The interest coverage ratio suggests the number of times 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.
CBRE Group, Inc., Tecnoglass Inc., Dillard's, Inc. and Boyd Gaming Corp. are four stocks with an impressive interest coverage ratio.
Here are our four picks out of the 11 stocks that qualified the screening:
CBRE Group, a commercial real estate services and investment firm, sports a Zacks Rank #1 and VGM Score of A. The expected EPS growth rate for three-five years is 11%. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CBRE Group's current financial year sales and EPS suggests growth of 22.3% and 6%, respectively, from the year-ago period. CBRE has a trailing four-quarter earnings surprise of 34.2%, on average. The stock has jumped 13.9% in the past year.
Tecnoglass, a leading manufacturer of architectural glass, windows, and associated aluminum products serving the global residential and commercial end markets, sports a Zacks Rank #1 and has a VGM Score of B. The expected EPS growth rate for three-five years is 20%.
The Zacks Consensus Estimate for Tecnoglass' current financial year sales and EPS suggests growth of 18.9% and 21.8%, respectively, from the year-ago period. TGLS has a trailing four-quarter earnings surprise of 39.9%, on average. The stock has zoomed 140.5% in the past year.
Dillard's, which operates retail department stores, carries a Zacks Rank #2 and has a VGM Score of A. The expected EPS growth rate for three-five years is 14.6%.
The Zacks Consensus Estimate for Dillard's current financial year sales suggests growth of 4.7% from the year-ago period. DDS has a trailing four-quarter earnings surprise of 294.5%, on average. The stock has zoomed 193% in the past year.
Boyd Gaming, which operates as a multi-jurisdictional gaming company, carries a Zacks Rank #2 and has a VGM Score of A. The expected EPS growth rate for three-five years is 48%.
The Zacks Consensus Estimate for Boyd Gaming's current financial year sales and EPS suggests growth of 2.3% and 2.9%, respectively, from the year-ago period. BYD has a trailing four-quarter earnings surprise of 48.8%, on average. The stock has rallied 15.1% in the past year.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1887402/scoop-up-these-4-promising-interest-coverage-ratio-stocks
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Dillard's, Inc. (DDS) : Free Stock Analysis Report
Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
CBRE Group, Inc. (CBRE) : Free Stock Analysis Report
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