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There is a lot more to profitability than whether a company's bottom line is increasing. Profits can come from several sources, with some better than others. To get a deeper look into a company's profit trends, we performed DuPont analysis on stocks of the S&P 500.

DuPont analyzes return on equity (ROE, or net income/equity) profitability by breaking ROE up into three components:

ROE

= (Net Profit/Equity)

= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)

= (Net Profit margin)*(Asset turnover)*(Leverage ratio)

We therefore focus on companies with the following positive characteristics: Increasing ROE along with,

• Decreasing leverage, i.e. decreasing Asset/Equity ratio

• Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio)

Companies with all of these characteristics are experiencing increasing profits due to operations and not to increased use of financial leverage.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these companies are in a strong operational position? Use this list as a starting point for your own analysis.

List sorted by increase in ROE.

1. Pioneer Natural Resources Co. (PXD): Engages in the exploration and production of oil and gas in the United States, South Africa, and Tunisia. Market cap of $11.64B. MRQ Net Profit Margin increased to 34.07% from 19.12% year-over-year, Sales/Assets increased to 0.09 from 0.06, while Assets/Equity decreased to 2.17 from 2.30. The stock has had a couple of great days, gaining 8.73% over the last week.

2. CONSOL Energy Inc. (CNX): Engages in the production of multi-fuel energy and provision of energy services primarily to the electric power generation industry in the United States. Market cap of $8.76B. MRQ Net Profit Margin increased to 11.0% from 5.59% year-over-year, Sales/Assets increased to 0.13 from 0.12, while Assets/Equity decreased to 3.55 from 3.77. The stock has had a couple of great days, gaining 5.2% over the last week.

3. Motorola Solutions, Inc. (MSI): Provides business and mission critical communication products and services for enterprise and government customers worldwide. Market cap of $15.19B. MRQ Net Profit Margin increased to 6.08% from 5.77% year-over-year, Sales/Assets increased to 0.14 from 0.07, while Assets/Equity decreased to 2.42 from 2.48. The stock has gained 18.36% over the last year.

4. Chevron Corporation (CVX): Engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. Market cap of $217.27B. MRQ Net Profit Margin increased to 12.15% from 7.58% year-over-year, Sales/Assets increased to 0.32 from 0.28, while Assets/Equity decreased to 1.69 from 1.73. The stock has gained 23.08% over the last year.

5. Harley-Davidson, Inc. (HOG): Produces and sells heavyweight motorcycles, as well as offers motorcycle parts, accessories, and related services. Market cap of $9.27B. MRQ Net Profit Margin increased to 13.14% from 7.05% year-over-year, Sales/Assets increased to 0.14 from 0.13, while Assets/Equity decreased to 3.73 from 4.59. This is a risky stock that is significantly more volatile than the overall market (beta = 2.17). The stock has gained 11.39% over the last year.

6. TECO Energy, Inc. (TE): An electric and gas utility company, through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electric energy. Market cap of $4.11B. MRQ Net Profit Margin increased to 9.90% from 5.66% year-over-year, Sales/Assets increased to 0.1249 from 0.1214, while Assets/Equity decreased to 3.23 from 3.46. The stock has gained 11.07% over the last year.

7. CareFusion Corporation (CFN): Provides various healthcare products and services in the United States and internationally. Market cap of $5.77B. MRQ Net Profit Margin increased to 7.94% from 4.69% year-over-year, Sales/Assets increased to 0.10213 from 0.10205, while Assets/Equity decreased to 1.61 from 1.66. The stock has gained 1.02% over the last year.

8. FedEx Corporation (FDX): Provides transportation, e-commerce, and business services in the United States and internationally. Market cap of $26.44B. MRQ Net Profit Margin increased to 4.69% from 2.94% year-over-year, Sales/Assets increased to 0.3721 from 0.3691, while Assets/Equity decreased to 1.7875 from 1.7920. The stock has lost 9.87% over the last year.

9. American Electric Power Co., Inc. (AEP): Engages in the generation, transmission, and distribution of electric power to retail customers. Market cap of $19.78B. MRQ Net Profit Margin increased to 21.44% from 13.68% year-over-year, Sales/Assets increased to 0.0847 from 0.0815, while Assets/Equity decreased to 3.48 from 3.64. The stock has gained 19.74% over the last year.

10. NYSE Euronext, Inc. (NYX): Operates securities exchanges. Market cap of $7.11B. MRQ Net Profit Margin increased to 15.90% from 12.19% year-over-year, Sales/Assets increased to 0.10 from 0.08, while Assets/Equity decreased to 1.91 from 2.0. The stock has lost 9.27% over the last year.

11. Harman International Industries Inc. (HAR): Engages in the development, manufacture, and marketing of audio products and electronic systems primarily in the United States, Germany, and other parts of Europe. Market cap of $2.77B. MRQ Net Profit Margin increased to 4.60% from 3.27% year-over-year, Sales/Assets increased to 0.35 from 0.31, while Assets/Equity decreased to 2.14 from 2.21. This is a risky stock that is significantly more volatile than the overall market (beta = 2.14). The stock has had a couple of great days, gaining 5.08% over the last week.

12. General Electric Company (GE): Operates as a technology, service, and finance company worldwide. Market cap of $195.84B. MRQ Net Profit Margin increased to 9.12% from 5.81% year-over-year, Sales/Assets increased to 0.0479 from 0.0466, while Assets/Equity decreased to 5.93 from 6.57. The stock has had a good month, gaining 14.72%.

13. Avalonbay Communities Inc. (AVB): Engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. Market cap of $12.34B. MRQ Net Profit Margin increased to 17.85% from 10.93% year-over-year, Sales/Assets increased to 0.0296 from 0.0294, while Assets/Equity decreased to 2.05 from 2.33. The stock is a short squeeze candidate, with a short float at 10.12% (equivalent to 11.71 days of average volume). The stock has gained 19.32% over the last year.

14. priceline.com Incorporated (PCLN): Operates as an online travel company. Market cap of $24.20B. MRQ Net Profit Margin increased to 32.32% from 22.26% year-over-year, Sales/Assets increased to 0.38 from 0.36, while Assets/Equity decreased to 1.60 from 1.68. The stock has gained 12.13% over the last year.

15. Tiffany & Co. (TIF): Engages in the design, manufacture, and retail of fine jewelry worldwide. Market cap of $8.47B. MRQ Net Profit Margin increased to 10.91% from 8.08% year-over-year, Sales/Assets increased to 0.21 from 0.19, while Assets/Equity decreased to 1.69 from 1.76. The stock has gained 12.05% over the last year.

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 15 S&P 500 Stocks With Strong Sources Of Profitability