A company that has
a big return on equity and also low debt ratios means that the high ratio was
not created by taking debt and boosting earnings. Great for us investors; we
own a piece of a high income generating company.
If the company can
scale up its sales by taking more debt and issuing new shares, our return could
boost. That's also one reason why I look at low debt with good return on equity
ratios. If the company also do stock buybacks and hiked dividends, great!
My experience is
that no companies fulfill everything. It's no shame when a company suffers and
do not meet every optimum value. Each business is volatile and risky.
I've tried to
create a screen, based on some return figures. Below are my 8 favorites. At the
end of this article, you can find a list with 16 additional stocks.
These are my main criteria:
- Midcap+
- Forward P/E under 15
- Operating Margin over 15 percent
- Debt-to-equity under 1
- Return on Equity 15%+
- Payout half of profits
- Mid-digit Earnigns growth forecasts
These are my main criteria:
- Midcap+
- Forward P/E under 15
- Operating Margin over 15 percent
- Debt-to-equity under 1
- Return on Equity 15%+
- Payout half of profits
- Mid-digit Earnigns growth forecasts
8 high return creating
stocks, low debt and price ratios included are...
ConocoPhillips (NYSE:COP) has a market capitalization of $98.33 billion. The company employs 19,200 people, generates revenue of $56,185.00 million and has a net income of $8,037.00 million. ConocoPhillips’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $20,761.00 million. The EBITDA margin is 36.95 percent (the operating margin is 22.78 percent and the net profit margin 14.30 percent).
Financial Analysis: The total debt represents 18.35 percent of ConocoPhillips’s assets and the total debt in relation to the equity amounts to 41.59 percent. Due to the financial situation, a return on equity of 15.94 percent was realized by ConocoPhillips. Twelve trailing months earnings per share reached a value of $6.49. Last fiscal year, ConocoPhillips paid $2.70 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.41, the P/S ratio is 1.75 and the P/B ratio is finally 1.88. The dividend yield amounts to 3.65 percent and the beta ratio has a value of 1.02.
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| Long-Term Stock Price Chart Of ConocoPhillips (COP) |
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| Long-Term Dividend Payment History of ConocoPhillips (COP) |
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| Long-Term Dividend Yield History of ConocoPhillips (COP) |
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Financial Analysis: The total debt represents 13.14 percent of Microsoft’s assets and the total debt in relation to the equity amounts to 25.22 percent. Due to the financial situation, a return on equity of 26.17 percent was realized by Microsoft. Twelve trailing months earnings per share reached a value of $2.63. Last fiscal year, Microsoft paid $1.12 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.06, the P/S ratio is 4.43 and the P/B ratio is finally 4.28. The dividend yield amounts to 2.66 percent and the beta ratio has a value of 0.97.
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| Long-Term Stock Price Chart Of Microsoft (MSFT) |
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| Long-Term Dividend Payment History of Microsoft (MSFT) |
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| Long-Term Dividend Yield History of Microsoft (MSFT) |
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Financial Analysis: The total debt represents 2.36 percent of Prudential’s assets and the total debt in relation to the equity amounts to 79.62 percent. Due to the financial situation, a return on equity of 13.45 percent was realized by Prudential. Twelve trailing months earnings per share reached a value of $1.73. Last fiscal year, Prudential paid $1.10 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 26.81, the P/S ratio is 0.69 and the P/B ratio is finally 3.78. The dividend yield amounts to 2.53 percent and the beta ratio has a value of 1.75.
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| Long-Term Stock Price Chart Of Prudential (PUK) |
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| Long-Term Dividend Payment History of Prudential (PUK) |
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| Long-Term Dividend Yield History of Prudential (PUK) |
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H & R Block (NYSE:HRB) has a market capitalization of $8.87 billion. The company employs 2,200 people, generates revenue of $3,024.30 million and has a net income of $500.10 million. H & R Block’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $944.48 million. The EBITDA margin is 31.23 percent (the operating margin is 25.24 percent and the net profit margin 16.54 percent).
Financial Analysis: The total debt represents 19.31 percent of H & R Block’s assets and the total debt in relation to the equity amounts to 58.24 percent. Due to the financial situation, a return on equity of 35.42 percent was realized by H & R Block. Twelve trailing months earnings per share reached a value of $1.81. Last fiscal year, H & R Block paid $0.80 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.82, the P/S ratio is 2.93 and the P/B ratio is finally 5.68. The dividend yield amounts to 2.48 percent and the beta ratio has a value of 1.01.
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| Long-Term Stock Price Chart Of H & R Block (HRB) |
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| Long-Term Dividend Payment History of H & R Block (HRB) |
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| Long-Term Dividend Yield History of H & R Block (HRB) |
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Financial Analysis: The total debt represents 15.47 percent of Symantec’s assets and the total debt in relation to the equity amounts to 36.14 percent. Due to the financial situation, a return on equity of 15.93 percent was realized by Symantec. Twelve trailing months earnings per share reached a value of $1.39. Last fiscal year, Symantec paid $0.60 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.50, the P/S ratio is 2.54 and the P/B ratio is finally 2.95. The dividend yield amounts to 2.44 percent and the beta ratio has a value of 0.84.
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| Long-Term Stock Price Chart Of Symantec (SYMC) |
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| Long-Term Dividend Payment History of Symantec (SYMC) |
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| Long-Term Dividend Yield History of Symantec (SYMC) |
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Financial Analysis: The total debt represents 0.04 percent of QUALCOMM’s assets and the total debt in relation to the equity amounts to 0.05 percent. Due to the financial situation, a return on equity of 19.69 percent was realized by QUALCOMM. Twelve trailing months earnings per share reached a value of $4.15. Last fiscal year, QUALCOMM paid $1.20 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.18, the P/S ratio is 5.15 and the P/B ratio is finally 3.57. The dividend yield amounts to 2.20 percent and the beta ratio has a value of 1.21.
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| Long-Term Stock Price Chart Of QUALCOMM (QCOM) |
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| Long-Term Dividend Payment History of QUALCOMM (QCOM) |
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| Long-Term Dividend Yield History of QUALCOMM (QCOM) |
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Financial Analysis: The total debt represents 15.48 percent of Gentex’s assets and the total debt in relation to the equity amounts to 20.57 percent. Due to the financial situation, a return on equity of 18.21 percent was realized by Gentex. Twelve trailing months earnings per share reached a value of $1.86. Last fiscal year, Gentex paid $0.56 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.64, the P/S ratio is 3.65 and the P/B ratio is finally 3.20. The dividend yield amounts to 2.19 percent and the beta ratio has a value of 1.09.
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| Long-Term Stock Price Chart Of Gentex (GNTX) |
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| Long-Term Dividend Payment History of Gentex (GNTX) |
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| Long-Term Dividend Yield History of Gentex (GNTX) |
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Financial Analysis: The total debt represents 21.29 percent of J2 Global’s assets and the total debt in relation to the equity amounts to 34.78 percent. Due to the financial situation, a return on equity of 16.20 percent was realized by J2 Global. Twelve trailing months earnings per share reached a value of $2.35. Last fiscal year, J2 Global paid $0.98 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 21.88, the P/S ratio is 4.71 and the P/B ratio is finally 3.35. The dividend yield amounts to 2.16 percent and the beta ratio has a value of 1.05.
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| Long-Term Stock Price Chart Of J2 Global (JCOM) |
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| Long-Term Dividend Payment History of J2 Global (JCOM) |
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| Long-Term Dividend Yield History of J2 Global (JCOM) |
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*I am long MSFT, SYMC. I receive
no compensation to write about these specific stocks, sector or theme. I don't
plan to increase or decrease positions or obligations within the next 72 hours.
For the other stocks: 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.
