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Wayne F. Wilbanks, CFA, is Prime Investment Officer and Managing Principal of Wilbanks, Thomas & Smith Asset Management, LLC. Mr. Willbanks has over 25 years of investment experience in several finance firms. He is quoted often in several broadcasts such as The Wall Street Journal, Bloomberg News, The Virginian-Pilot, Dow Jones News Wire, and Bond Week. He picked four stocks in an interview on September 23 on CNBC’s Street Signs program. I have investigated all of these stocks from a fundamental perspective, adding my opinion about them. I have applied my O-Metrix Grading System where possible. (Data obtained from Finviz/Morningstar, and is current as of September. 30)

PepsiCo Inc (PEP): PepsiCo is a global food, snack and beverage company. Mr. Wilbanks suggests:

You have got to step back and look at a company like Pepsi. It is generating huge cash flow. It is a value trap because it is trading at 12 or 13 times earnings. This company's generating the ability to raise its dividend. What you have to do on a company like Pepsi, they have tripled dividend over the last decade.

The stock was trading at a P/E ratio of 15.9, and a forward P/E ratio of 13.0, as of the September 30 close. Analysts expect the company to have a 7.5% annualized EPS growth in the next five years. With a profit margin of 10.1%, shareholders enjoyed a 3.33% dividend last year. The stock is currently trading 12.57% lower than its 52-week high, whereas it returned -7.7% in the last twelve months. While gross margin is 53.9%, operating margin is 15.2%. Debt-to equity ratio is 0.9, better than the industry average of 1.0. ROA, ROE, and ROI are 8.97%, 28.97% and 13.29%, respectively. Analysts give a 2.30 recommendation for PepsiCo (1=Buy, 5=Sell). O-Metrix score of PepsiCo is 3.74, and its target price implies a 20.6% upside potential. Moreover, it has a four-star rating from Morningstar.

Wal-Mart Stores Inc (WMT): Wal-Mart Stores operates retail stores. Mr. Wilbanks suggests:

They tripped up some on the initial trip into the international world, but they are really starting to figure it out. That's where people underestimating Wal-Mart's potential.

The stock was trading at a P/E ratio of 11.7, and a forward P/E ratio of 10.6, as of the Friday close. Analysts expect the company to have an annualized EPS growth of 11.8% in the next 5 years. Profit margin is 3.9%, and it offered a 2.81% dividend last year. O-Metrix score of Wal-Mart is 6.16. The stock is currently trading 8.47% lower than its 52-week high, and it returned -2.8% in the last twelve months. While gross margin is 53.06%, operating margin is 50.7%. ROA, ROE, and ROI are 9.01%, 25.18% and 13.97%, respectively. PEG value is 0.9. Wal-Mart is a dividend pick for the next five years. Moreover, it has a four-star rating from Morningstar. Consider adding this stock to your portfolio after a pullback.

The Procter & Gamble Co (PG): The Procter & Gamble Co is focused on providing consumer packaged goods. It is also on Wayne’s list.

The Procter & Gamble was trading at a P/E ratio of 16.2, and a forward P/E ratio of 13.8, as of the September 30 close. Analysts expect the company to have a 9.0% annualized EPS growth in the next five years. With a profit margin of 14.0%, shareholders enjoyed a 3.32% dividend last year. The stock is currently trading 5.94% lower than its 52-week high, whereas it has an O-Metrix score of 4.10. Target price is $70.75, indicating an 11.9% increase potential. The stock returned 5.0% in the last twelve months. ROA is 8.68%, and ROE is 18.32%. While gross margin is 50.6%, operating margin is 19.2%. Debt-to equity ratio is 0.3, far better than the industry average of 1.4. Analysts give a 2.0 recommendation for Procter & Gamble (1=Buy, 5=Sell). Moreover, it has a four-star rating from Morningstar. Procter & Gamble is a Jim Cramer play, as well. However, a pullback should be waited for.

Microsoft Corporation (MSFT): Microsoft is engaged in developing, licensing and supporting a range of software products and services.

The tech titan was trading at a P/E ratio of 9.5, and a forward P/E ratio of 8.1, as of September 30. Estimated annual EPS growth for the next five years is 11.1%. It paid a 3.21% dividend last year, while the profit margin was 33.1%. Microsoft returned 2.0% in the last twelve months, whereas it has a remarkable O-Metrix score of 8.13. Debt-to assets ratio is nearly stable for the last four quarters. Debt-to equity ratio is 0.2, which crushes the industry average of 10.6. Target price implies a 28.1% upside potential, and it is currently trading 13.90% lower than its 52-week high. Gross margin and profit margin are 77.7% and 38.8%, respectively. While ROE is 44.84%, ROA is 23.77%. PEG value is 0.7. P/E ratio, operating margin (38.8%), profit margin, and ROE are moderate green flags. Moreover, it has a four-star rating from Morningstar. Microsoft should be considered a long-term play. (Full analysis of Microsoft, here.)

Source: 4 Bullish Stock Mentions By Wayne Wilbanks