Are you interested in basic materials stocks? Do you prefer dividend stocks? Do you prefer companies with strong profits? Do you look for companies with low debt? For ideas on how to evaluate names with these characteristics, we ran a screen.
EPS (earnings per share) growth illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.
ROA (return on assets) illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how profitable the company is relative to the assets it currently possesses. Also, it lets investors see how efficient and effective management is at generating earnings from the company's assets. While most management teams can probably make money by throwing money at an issue, very few can make very large profits with little investment.
The debt/equity ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.
We first looked for basic materials dividend stocks. We then looked for companies that have shown strong bottom-line growth over the last year (one-year fiscal EPS growth rate > 10%; ROA > 10%). We then screened for businesses that have maintained a sound capital structure (D/E Ratio < 0.3). We did not screen out any market caps.
Do you think these stocks are undervalued and should be trading higher? Use our screened list as a starting point for your own analysis.
1. Apco Oil & Gas International (NASDAQ:APAGF)
|Industry:||Independent Oil & Gas|
Apco Oil & Gas International has a dividend yield of 0.19%, EPS growth of 34.23%, a return on assets of 22.85%, and a debt/equity ratio of 0.00. The short interest was 28.00% as of April 29, 2012.
Apco Oil & Gas engages in the exploration and production of oil and gas primarily in South America. The company has working interests in the Entre Lomas, Bajada del Palo, and Charco del Palenque concessions, as well as the Agua Amarga exploration permit in the Neuquen basin in Argentina. As of Sept. 30, 2011, it had interests in eight oil and gas producing concessions and two exploration permits in Argentina.
2. Globe Specialty Metals (NASDAQ:GSM)
|Industry:||Industrial Metals & Minerals|
Globe Specialty Metals has a dividend yield of 1.48%, EPS growth of 51.11%, a return on assets of 11.04%, and a debt/equity ratio of 0.21. The short interest was 5.32% as of April 29, 2012.
Globe Specialty Metals, together with its subsidiaries, produces and sells silicon metal and silicon-based alloys in North America, Europe, South America, and Asia. The company primarily offers silicon metal that is used as a raw material for silicone compounds, aluminum, and polysilicon. It also produces silicon-based alloys, such as ferrosilicon; magnesium-ferrosilicon-based alloys known as nodularizers; ferrosilicon-based alloys known as inoculants; calcium silicon alloys; and cored-wire silicon-based alloy products, as well as carbon electrodes, silica fume, and fines.
3. Carbo Ceramics (NYSE:CRR)
|Industry:||Oil & Gas Equipment & Services|
Carbo Ceramics has a dividend yield of 1.15%, EPS growth of 65.14%, a return on assets of 19.42%, and a debt/equity ratio of 0.00. The short interest was 35.02% as of April 29, 2012.
Carbo Ceramics manufactures and supplies resin-coated ceramic and resin-coated sand proppants primarily used in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. The company offers proppants, including CARBOHSP and CARBOPROP designed for use in deep gas wells; CARBOLITE used in medium depth oil and gas wells; CARBOECONOPROP; CARBOHYDROPROP used to enhance performance in slickwater fracture treatments; CARBOBOND LITE for oil and natural gas wells that are subject to the risk of proppant flow-back; and CARBOBOND RCS, a conductivity proppant. It also provides fracture simulation software, as well as offers fracture design, engineering, and consulting services to oil and natural gas companies.
4. Balchem Corp. (NASDAQ:BCPC)
|Industry:||Chemicals - Major Diversified|
Balchem has a dividend yield of 0.62%, EPS growth of 14.09%, a return on assets of 15.50%, and a debt/equity ratio of 0.01. The short interest was 4.55% as of April 29, 2012.
Balchem develops, manufactures, and sells specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally. It operates in three segments: Specialty Products; Food, Pharma & Nutrition; and Animal Nutrition & Health. The Specialty Products segment offers ethylene oxide primarily for use in the health care industry; and single use canisters with ethylene oxide for use in medical device sterilization. It also sells propylene oxide as a fumigant to aid in the control of insects and microbiological spoilage; to reduce bacterial and mold contamination; to customers seeking smaller quantities and whose requirements include utilization in various chemical synthesis applications; and to make paints durable, as well as for manufacturing specialty starches and textile coatings.
Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.