The five companies listed below are all capitalizing on positive catalysts, such as lucrative contracts, growing demand for credit in booming markets like Latin America, favorable investor sentiment, and decreasing input costs. I have chosen these five companies for my research because they have solid assets and innovative growth strategies, and are proven market leaders within their industries. Below I will show how these five companies are positioned to continue on a high level of growth. As always, please use my research as a starting point for your own due diligence.
Goodyear Tire (NYSE:GT)
Goodyear Tire & Rubber manufactures tires for commercial trucks, automobile, airplanes and heavy earth-mover machinery. Not many investors have noticed how Goodyear seems to announce highest recorded profits when other stocks are down. Although the demand for tires is cyclical, Goodyear's profit margins are heavily dependent on the economically sensitive price of natural rubber. This allows the company to record highest profits at times when the economy is weakest by using the international price of rubber to its advantage. Therefore, for investors interested in buying shares of this stock, timing is the key.
Since the 3rd quarter of 2011, share price of this stock has seen a steady decline from $18 to $13 even though the company has declared huge profits in the following fiscal quarters. Goodyear has a total market capitalization of nearly $3.5 billion with an average trading volume close to 5 million. The company enjoys favorable investor sentiment with earnings per share of around $2.50 against a price to earnings ratio of 30.84.
Goodyear has traditionally enjoyed a good dividend history with a healthy payout ratio and dividend yield. Because the profits of Goodyear are tied to the global price of rubber, my assessment of its recent financial performance along with an observation of market statistics suggest that the company will earn sizable profits amidst a sharp decline in rubber price. Since February 2011, rubber prices have fallen by as much as 36% as a result of oversupply. These prevailing conditions could allow the company to extend its earnings per share to nearly $3 this year. Therefore, Goodyear is a safe and lucrative investment haven for 2012.
Lockheed Martin (NYSE:LMT)
Loyal investors of Lockheed Martin stock are in a fix whether to retain their investments in America's leading manufacturer of military equipment. The planned pullout of military forces from Middle East and Afghanistan is inferred as a bad omen by investors who see a marginal decline in America's military budget. Investors fear that this cut in defense spending is likely to hurt Lockheed Martin. Lockheed Martin has recently been awarded a $66 million contract to support a U.S. Army research lab. However, the company earns sizable revenue though international sale contracts and these have shown a remarkable increase in recent years. The company sees the opening of new frontiers with expanding markets in Korea, China, Korea and India.
Lockheed Martin has a huge market capitalization of over $28 billion with average trading volume exceeding $2 million. The price to earnings ratio is decent at 10.78 with earnings per share exceeding $8. The company has enjoyed a good dividend history in recent times, which has inspired favorable investor sentiment. It currently has a dividend payout ratio of 1 and a yield of nearly 5%. According to my analysis of leading financial indicators and historical data, Lockheed Martin will show significant growth of at least 3% in 2012.
Royal Bank of Canada (NYSE:RY)
Until recently, stocks of leading banks were the most lucrative investment venture for investors. They were a safe and stable source of income for dividend-oriented investors. With the global economic crisis, leading banks like Citigroup and Bank of America were forced to considerably slash payouts. However, Canadian banks have remained relatively unscathed amidst the global economic crisis owing to more clever policies and regulations. Because of more stringent and severe capital requirements, RBC has managed to retain a Tier 1 Capital Ratio of 13.2%, which is significantly higher than the 11.1% that the top American banks offer. Investors have recently realized that Royal Bank of Canada offers unmatched banking service in Canada and the Caribbean.
It has a total market capitalization exceeding $78 billion with an average trading volume of nearly $1 million. Share price has been relatively stable at around $53 for the last 52 weeks, and investor sentiment is favorable amidst a price to earnings ratio of more than 14 and earnings per share of nearly $4. Royal Bank has a good dividend history with a 5.1% dividend yield and a payout ratio of 51% both of which are backed by a substantial increase of 13% in revenues in the third quarter of 2011. Royal Bank of Canada is forecast to continue its performance from the previous year, and this makes it a good investment venture for the current year.
Banco Santander (STD)
The Santander Group is a Spanish banking group. It is centered on Banco Santander, S.A., the largest bank in the eurozone. It has been ranked as the 13th largest public limited company across the globe on Forbes's Global 2000 list. Banco Santander is one of the largest banks in the world in terms of market capitalization. It currently has a market capitalization of nearly $80 billion with an average trading volume just shy of $6 million. At a share price of around $9, the company has a promising price to earnings ratio of around 7 and earnings per share are impressive at around 1.5%.
With the start of 2012, Banco Santander announced that the fourth quarter of 2012 did not fare that well with net profit collapsing by nearly 98%. However, only last year, Santander increased lending by 4% amidst a growing demand for credit in Latin America. Banco Santander enjoys favorable investor sentiment with a good dividend history. With a dividend payout ratio of around 0.2 and a yield of nearly 7.5%, I would still rate Banco Santander as a safe and lucrative haven for investors.
FedEx is the leading provider of transportation, business and e-commerce services with a broad clientele of customers across the globe. Over the years, FedEx has earned a reputation as a safe stock investment with a market capitalization of nearly $30 billion and average trading volume of as much as $2.5 million. The share price of FedEx stock has remained perpetually consistent at around $95; healthy price to earnings ratio of above 17 and earnings per share of nearly 6% has helped it build favorable investor sentiment.
FedEx shares rose almost 5% at the close of the financial year 2012 at a price of nearly $80.99. This makes the stock the third-best performer in the S&P 500 Index. The company has enjoyed a good dividend history with a payout ratio exceeding 0.1 and a yield of more than 0.5%. The recent announcement by FedEx to introduce SenseAware for comprehensive real-time tracking of information has been seen as a sign of FedEx's renewed drive toward growth by investors as well as financial analysts. In my opinion, the company is set to grow over the year and this will means that investors can enjoy higher profits.