These six blue chip stocks have positive catalysts for future growth, above industry average profit margins, above industry average price to sales ratios and excellent price performance over the last 52 week period. These are bullish indicators regarding a stock's possible future performance. Robust profit and sales margins are traits of notable names. Moreover, most of these stocks are trading well below consensus analysts’ estimates; several have recent upgrades and positive analyst comments.
Nonetheless, this is only the first step in finding winners for your portfolio. Now that we have cut the wheat from the chaff, let's take a closer look to distinguish the driving factors behind these remarkable statistics and ensure the stories are intact.
Below is a table with detailed statistics regarding each company’s current summary information followed by a brief review of each company, detailed current analysts' estimates and up/downgrade activity followed by a chart of the company's key statistics.
Company Summary Statistics
Exxon Mobil Corporation (NYSE:XOM) engages in the exploration, production, transportation and sale of crude oil and natural gas. It also involves in the manufacture, transportation and sale of petroleum products.
Exxon Mobil Corporation’s U.S. marine affiliate, SeaRiver Maritime, Inc., signed a letter of intent with Aker Philadelphia Shipyard, a leading U.S. shipbuilding facility in Pennsylvania, for the construction of two U.S. flag crude oil tankers in partnership with Samsung Heavy Industries (OTC:SMSHF), a leader in shipbuilding technologies. The vessels will be used to transport Alaska North Slope crude oil from Prince William Sound, Alaska to U.S. West Coast destinations.
The company is trading below analysts' estimates. Exxon has a median price target of $93.50 by 15 brokers and a high target of $102. The last up/downgrade activity was on Jan 14, 2011, when Standpoint Research downgraded the company from Buy to Hold.
Chevron Corporation (NYSE:CVX), through its subsidiaries, engages in petroleum, chemicals, mining, power generation and energy operations worldwide. It operates in two segments, Upstream and Downstream.
Chevron recently reported in its interim update that earnings for the second quarter 2011 are expected to be higher than in the first quarter 2011. Upstream results are projected to improve between sequential quarters, benefiting from higher crude oil prices. Downstream earnings in the second quarter are also expected to be higher, reflecting improved industry margins.
The company is trading below analysts' estimates. Chevron has a median price target of $121 by 18 brokers and a high target of $137. The last up/downgrade activity was on Oct 6, 2010, when Standpoint Research downgraded the company from a Buy to a Hold.
The Coca-Cola Company (NYSE:KO) manufactures, distributes and markets nonalcoholic beverage concentrates and syrups worldwide.
The Coca-Cola Company recently declared a regular quarterly dividend of 47 cents per common share. The dividend is payable Oct. 1, 2011, to share owners of record as of Sept. 15, 2011.
The company is trading below analysts' estimates. Coca-Cola has a median price target of $74 by 15 brokers and a high target of $95. The last up/downgrade activity was on March 4, 2010, when UBS upgraded the company from Neutral to Buy.
McDonald’s Corporation (NYSE:MCD), together with its subsidiaries, operates as a worldwide foodservice retailer.
McDonald's recently announced strong results for the second quarter ended June 30, 2011, driven by growth across all areas of the world.
McDonald's Chief Executive Officer Jim Skinner said:
"McDonald's ongoing momentum reflects our commitment to the customer. By providing relevant food and beverage choices in convenient, modern restaurants, we're giving customers more reasons to visit us more often. McDonald's global results for the quarter demonstrate the resilience of our Plan to Win and our ability to execute successfully. Comparable sales and guest count increases across all segments, highlighted by June's strong results, drove double-digit operating income and earnings per share growth."
The company is trading below analysts' estimates. McDonald’s has a median price target of $87 by 20 brokers and a high target of $93. The last up/downgrade activity was on Jan. 18 when RBC Capital Markets upgraded the company from Sector Perform to Outperform.
United Technologies Corp. (NYSE:UTX) provides technology products and services to the building systems and aerospace industries worldwide. The company’s Otis segment designs, manufactures, sells and installs passenger and freight elevators, escalators and moving walkways, as well as provides maintenance and repair services.
United Technologies recently reported second quarter 2011 earnings per share of $1.45 and net income attributable to common share owners of $1.3 billion, up 21 percent and 19 percent, respectively, over the year ago quarter. Sales of $15.1 billion for the quarter were 9 percent above prior year with 6 points of organic growth and 4 points of favorable foreign currency translation, partially offset by 1 point of net divestitures.
The company is trading below analysts' estimates. United Technologies has a median price target of $100 by 18 brokers and a high target of $110. The last up/downgrade activity was on Feb 7, 2011, when Argus upgraded the company from Hold to Buy.
The Home Depot, Inc. (NYSE:HD) together with its subsidiaries operates as a home improvement retailer. The company’s stores sell a range of building materials, home improvement products and lawn and garden products to do-it-yourself, do-it-for-me (D-I-F-M) and professional customers.
Home Depot recently reported first quarter of fiscal 2011 net earnings of $812 million, or $0.50 per diluted share, compared with net earnings of $725 million, or $0.43 per diluted share, in the same period of fiscal 2010. For the first quarter of fiscal 2011, diluted earnings per share increased 16.3 percent from the prior year.
The company is trading below analysts' estimates. Home Depot has a median price target of $41.50 by 22 brokers and a high target of $46. The last up/downgrade activity was on Dec 9, 2010, when FBR Capital upgraded the company from Market Perform to Outperform.
Information was gathered from CNBC, Yahoo Finance and respective company websites. Based on the current market conditions I would suggest scaling in to any position to reduce risk. I believe all these stocks are currently undervalued and provide significant opportunities for long term investors. Use this information as a starting point for your own due diligence.
Disclosure: I have no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.