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Interested in stocks with less risk? One idea is to find stocks that have recently been trading within narrow ranges each day. We ran DuPont analysis on low volatility stocks, finding those that have traded within a 2% range each day over the last month. 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 have strong profitability? Use this list as a starting point for your own analysis.

List sorted by increase in ROE.

1. Motorola Solutions, Inc. (NYSE:MSI): Provides business and mission critical communication products and services for enterprise and government customers worldwide. Market cap of $15.58B. Average intra-day volatility over the last month at 1.34%. 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 25.06% over the last year.

2. Chevron Corporation (NYSE:CVX): Engages in petroleum, chemicals, mining, power generation and energy operations worldwide. Market cap of $212.53B. Average intra-day volatility over the last month at 1.47%. 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. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.04%, current ratio at 1.64, and quick ratio at 1.45. The stock has gained 16.99% over the last year.

3. FedEx Corporation (NYSE:FDX): Provides transportation, e-commerce, and business services in the United States and internationally. Market cap of $28.55B. Average intra-day volatility over the last month at 1.77%. 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 3.2% over the last year.

4. American Electric Power Co., Inc. (NYSE:AEP): Engages in the generation, transmission and distribution of electric power to retail customers. Market cap of $19.64B. Average intra-day volatility over the last month at 1.02%. 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 16.37% over the last year.

5. Honeywell International Inc. (NYSE:HON): Operates as a diversified technology and manufacturing company worldwide. Market cap of $44.58B. Average intra-day volatility over the last month at 1.47%. MRQ Net Profit Margin increased to 9.27% from 7.35% year-over-year, Sales/Assets increased to 0.24 from 0.21, while Assets/Equity decreased to 3.38 from 3.69. The stock has gained 6.78% over the last year.

6. Eaton Corporation (NYSE:ETN): Operates as a power management company worldwide. Market cap of $16.31B. Average intra-day volatility over the last month at 1.97%. MRQ Net Profit Margin increased to 8.85% from 7.50% year-over-year, Sales/Assets increased to 0.23 from 0.21, while Assets/Equity decreased to 2.28 from 2.36. The stock has had a good month, gaining 11.69%.

7. Estee Lauder Companies Inc. (NYSE:EL): Engages in the manufacture, marketing, and sale of skin care, makeup, fragrance and hair care products worldwide. Market cap of $11.19B. Average intra-day volatility over the last month at 1.83%. MRQ Net Profit Margin increased to 11.25% from 9.14% year-over-year, Sales/Assets increased to 0.40 from 0.37, while Assets/Equity decreased to 2.48 from 2.66. The stock has gained 40.49% over the last year.

8. Entergy Corporation (NYSE:ETR): Operates as an integrated energy company in the United States. Market cap of $12.23B. Average intra-day volatility over the last month at 1.32%. MRQ Net Profit Margin increased to 18.64% from 14.94% year-over-year, Sales/Assets increased to 0.0867 from 0.0862, while Assets/Equity decreased to 4.22 from 4.28. The stock has lost 1.07% over the last year.

9. Kraft Foods Inc. (KFT): Manufactures and markets packaged food products worldwide. Market cap of $67.67B. Average intra-day volatility over the last month at 1.14%. MRQ Net Profit Margin increased to 6.97% from 6.36% year-over-year, Sales/Assets increased to 0.14 from 0.13, while Assets/Equity decreased to 2.62 from 2.68. The stock has gained 26.03% over the last year.

10. Northrop Grumman Corporation (NYSE:NOC): Provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. Market cap of $15.68B. Average intra-day volatility over the last month at 1.43%. MRQ Net Profit Margin increased to 7.86% from 7.03% year-over-year, Sales/Assets increased to 0.26 from 0.23, while Assets/Equity decreased to 2.10 from 2.29. The stock has lost 0.74% over the last year.

11. Boston Properties Inc. (NYSE:BXP): Engages in the ownership and development of office properties. Market cap of $15.07B. Average intra-day volatility over the last month at 1.67%. MRQ Net Profit Margin increased to 15.59% from 14.92% year-over-year, Sales/Assets increased to 0.0324 from 0.0296, while Assets/Equity decreased to 2.90 from 2.92. The stock is a short squeeze candidate, with a short float at 7.19% (equivalent to 10.07 days of average volume). The stock has gained 15.02% over the last year.

12. Dollar General Corporation (NYSE:DG): Operates as a discount retailer of general merchandise in the southern, southwestern, midwestern and eastern United States. Market cap of $14.31B. Average intra-day volatility over the last month at 1.46%. MRQ Net Profit Margin increased to 4.76% from 3.97% year-over-year, Sales/Assets increased to 0.37 from 0.34, while Assets/Equity decreased to 2.14 from 2.45. The stock has gained 44.21% over the last year.

13. Archer Daniels Midland Company (NYSE:ADM): Procures, transports, stores, processes and merchandises agricultural commodities and products in the United States and internationally. Market cap of $19.92B. Average intra-day volatility over the last month at 1.77%. MRQ Net Profit Margin increased to 2.10% from 2.05% year-over-year, Sales/Assets increased to 0.53 from 0.47, while Assets/Equity decreased to 2.25 from 2.34. The stock has lost 8.89% over the last year.

14. Unitedhealth Group, Inc. (NYSE:UNH): Provides healthcare services in the United States. Market cap of $54.72B. Average intra-day volatility over the last month at 1.72%. MRQ Net Profit Margin increased to 4.85% from 4.34% year-over-year, Sales/Assets increased to 0.3817 from 0.3810, while Assets/Equity decreased to 2.40 from 2.44. Might be undervalued at current levels, with a PEG ratio at 0.93, and P/FCF ratio at 10.33. The stock has gained 30.64% over the last year.

15. Goodrich Corp. (NYSE:GR): Supplies aerospace components, systems, and services primarily in the United States, Canada, Europe, and the Asia Pacific. Market cap of $15.59B. Average intra-day volatility over the last month at 0.24%. MRQ Net Profit Margin increased to 9.89% from 9.16% year-over-year, Sales/Assets increased to 0.20 from 0.18, while Assets/Equity decreased to 2.70 from 2.93. The stock has gained 38.66% over the last year.

16. Visa, Inc. (NYSE:V): Operates retail electronic payments network worldwide. Market cap of $82.20B. Average intra-day volatility over the last month at 1.94%. MRQ Net Profit Margin increased to 36.93% from 36.56% year-over-year, Sales/Assets increased to 0.07 from 0.06, while Assets/Equity decreased to 1.31 from 1.34. The stock has gained 41.83% over the last year.

17. Staples, Inc. (NASDAQ:SPLS): Operates as an office products company. Market cap of $11.23B. Average intra-day volatility over the last month at 1.87%. MRQ Net Profit Margin increased to 4.97% from 4.42% year-over-year, Sales/Assets increased to 0.48 from 0.47, while Assets/Equity decreased to 1.90 from 2.05. The stock has had a couple of great days, gaining 7% over the last week.

18. Ross Stores Inc. (NASDAQ:ROST): Operates off-price retail apparel and home accessories stores under the Ross Dress for Less and dd's Discounts brand names in the United States. Market cap of $11.89B. Average intra-day volatility over the last month at 1.86%. MRQ Net Profit Margin increased to 7.04% from 6.48% year-over-year, Sales/Assets increased to 0.64 from 0.63, while Assets/Equity decreased to 2.20 from 2.31. The stock has gained 60.56% over the last year.

19. United Technologies Corp. (NYSE:UTX): Provides technology products and services to the building systems and aerospace industries worldwide. Market cap of $70.48B. Average intra-day volatility over the last month at 1.53%. MRQ Net Profit Margin increased to 8.94% from 8.80% year-over-year, Sales/Assets increased to 0.24 from 0.22, while Assets/Equity decreased to 2.74 from 2.85. The stock has lost 2.35% over the last year.

20. Baxter International Inc. (NYSE:BAX): Develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. Market cap of $30.23B. Average intra-day volatility over the last month at 1.31%. MRQ Net Profit Margin increased to 16.56% from 16.28% year-over-year, Sales/Assets increased to 0.19 from 0.18, while Assets/Equity decreased to 2.57 from 2.69. The stock has gained 10.49% over the last year.

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

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 20 Low Volatility Stocks With Strong Sources Of Profitability