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5 Stocks That Warren Buffett Would Love: Part II

Yesterday, I wrote about stocks that Warren Buffett would love. 

I introduced five picks that are often mentioned when analysts talk about potential takeover targets by the guru investor from Omaha.

Today I will continue this stock idea spinning by showing you additional companies that fulfill the following criteria:


- Market Capitalization from $15 Billion to $40 Billion
- Capital Expenditures / Net Fixed Assets under 10%
- 5-Year Average Growth in ROIC in Highest 50%
- P/E Ratio Below Average Company Value in Home Market
- Return on Common Equity over 10%
- Excludes Banks, Brokerages, Asset Managers, Technology, Biotechnology Companies

There are a few stocks available on the market that fulfill these restrictions. Some of those stocks are still in his latest portfolio but there are also many fresh ideas as you might have seen in the first part of this article serial.

Additional 5 stocks that Warren Buffett would love are...

Plains All American Pipeline (NYSE:PAA) has a market capitalization of $17.70 billion. The company employs 4,700 people, generates revenue of $37.797 billion and has a net income of $1.127 billion. Plains All American Pipeline’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.928 billion. The EBITDA margin is 5.10 percent (the operating margin is 3.77 percent and the net profit margin 2.98 percent).

Financial Analysis: The total debt represents 38.50 percent of Plains All American Pipeline’s assets and the total debt in relation to the equity amounts to 111.59 percent. Due to the financial situation, a return on equity of 13.47 percent was realized by Plains All American Pipeline. Twelve trailing months earnings per share reached a value of $2.89. Last fiscal year, Plains All American Pipeline paid $2.11 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.86, the P/S ratio is 0.46 and the P/B ratio is finally 2.68. The dividend yield amounts to 4.69 percent and the beta ratio has a value of 0.39.


Long-Term Stock Price Chart Of Plains All American Pipeline (PAA)
Long-Term Dividend Payment History of Plains All American Pipeline (PAA)
Long-Term Dividend Yield History of Plains All American Pipeline (PAA)

Northrop Grumman (NYSE:NOC) has a market capitalization of $25.70 billion. The company employs 68,100 people, generates revenue of $25.218 billion and has a net income of $1.978 billion. Northrop Grumman’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.614 billion. The EBITDA margin is 14.33 percent (the operating margin is 12.41 percent and the net profit margin 7.84 percent).

Financial Analysis: The total debt represents 14.82 percent of Northrop Grumman’s assets and the total debt in relation to the equity amounts to 41.36 percent. Due to the financial situation, a return on equity of 19.93 percent was realized by Northrop Grumman. Twelve trailing months earnings per share reached a value of $8.36. Last fiscal year, Northrop Grumman paid $2.15 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.84, the P/S ratio is 1.01 and the P/B ratio is finally 2.87. The dividend yield amounts to 2.14 percent and the beta ratio has a value of 1.06.


Long-Term Stock Price Chart Of Northrop Grumman (NOC)
Long-Term Dividend Payment History of Northrop Grumman (NOC)
Long-Term Dividend Yield History of Northrop Grumman (NOC)

Johnson Controls (NYSE:JCI) has a market capitalization of $34.62 billion. The company employs 170,000 people, generates revenue of $42.730 billion and has a net income of $1.297 billion. Johnson Controls’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.679 billion. The EBITDA margin is 8.61 percent (the operating margin is 5.77 percent and the net profit margin 3.04 percent).

Financial Analysis: The total debt represents 13.07 percent of Johnson Controls’s assets and the total debt in relation to the equity amounts to 33.45 percent. Due to the financial situation, a return on equity of 9.84 percent was realized by Johnson Controls. Twelve trailing months earnings per share reached a value of $1.71. Last fiscal year, Johnson Controls paid $0.76 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 29.91, the P/S ratio is 0.81 and the P/B ratio is finally 2.84. The dividend yield amounts to 1.72 percent and the beta ratio has a value of 1.89.


Long-Term Stock Price Chart Of Johnson Controls (JCI)
Long-Term Dividend Payment History of Johnson Controls (JCI)
Long-Term Dividend Yield History of Johnson Controls (JCI)

Estee Lauder (NYSE:EL) has a market capitalization of $28.96 billion. The company employs 40,200 people, generates revenue of $10.181 billion and has a net income of $1.023 billion. Estee Lauder’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.901 billion. The EBITDA margin is 18.68 percent (the operating margin is 14.80 percent and the net profit margin 10.06 percent).

Financial Analysis: The total debt represents 18.81 percent of Estee Lauder’s assets and the total debt in relation to the equity amounts to 40.90 percent. Due to the financial situation, a return on equity of 33.88 percent was realized by Estee Lauder. Twelve trailing months earnings per share reached a value of $2.59. Last fiscal year, Estee Lauder paid $1.08 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 28.86, the P/S ratio is 2.84 and the P/B ratio is finally 8.81. The dividend yield amounts to 1.07 percent and the beta ratio has a value of 1.25.


Long-Term Stock Price Chart Of Estee Lauder (EL)
Long-Term Dividend Payment History of Estee Lauder (EL)
Long-Term Dividend Yield History of Estee Lauder (EL)

Agilent Technologies (NYSE:A) has a market capitalization of $19.08 billion. The company employs 20,500 people, generates revenue of $6.782 billion and has a net income of $724.00 million. Agilent Technologies’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.487 billion. The EBITDA margin is 21.93 percent (the operating margin is 14.02 percent and the net profit margin 10.68 percent).

Financial Analysis: The total debt represents 25.26 percent of Agilent Technologies’s assets and the total debt in relation to the equity amounts to 51.06 percent. Due to the financial situation, a return on equity of 13.83 percent was realized by Agilent Technologies. Twelve trailing months earnings per share reached a value of $2.10. Last fiscal year, Agilent Technologies paid $0.46 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 27.36, the P/S ratio is 2.80 and the P/B ratio is finally 3.61. The dividend yield amounts to 0.92 percent and the beta ratio has a value of 1.49.


Long-Term Stock Price Chart Of Agilent Technologies (A)
Long-Term Dividend Payment History of Agilent Technologies (A)
Long-Term Dividend Yield History of Agilent Technologies (A)


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*I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

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