Interested in consumer companies? Interested in companies with minimal debt? Do you prefer companies that can manage their long term debt? Do you prefer stocks that can bring in profits over the long term? Here are some interesting ideas to get you started.
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.
The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 5-Year Expected EPS Growth Rate is a long term annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for consumer stocks. We then looked for companies that operate with little to no debt (D/E Ratio<.3). We then looked for businesses that operate with little to no long term debt (Long Term D/E Ratio<.3). We then screened for businesses that have expected earnings per share growth of more than 25 percent for the next five years(5-year projected EPS Growth Rate>25%). We did not screen out any market caps.
Do you think these stocks should be trading higher? Use this list as a starting-off point for your own analysis.
1) Jones Soda Co. (JSDA)
|Industry:||Beverages - Soft Drinks|
Jones Soda Co. has a Debt/Equity Ratio of 0.02 and Long Term Debt/Equity Ratio of 0.02 and 5-Year Projected Earnings Per Share Growth Rate of 50.00%. The short interest was 0.52% as of 05/17/2012. Jones Soda Co., together with its subsidiaries, develops, produces, markets, distributes, and licenses premium beverages primarily in the United States and Canada. The company provides Jones Soda, a carbonated soft drink; Jones Zilch, a zero calories product in black cherry, pomegranate, and vanilla bean flavors; WhoopAss Energy Drink, an energy supplement drink; and WhoopAss Zero Energy Drink, an energy supplement drink with zero sugar. It also offers various products, including soda with customized labels, wearables, candy, and other items online.
2) Fortune Brands Home & Security, Inc. (FBHS)
|Industry:||Home Furnishings & Fixtures|
Fortune Brands Home & Security, Inc. has a Debt/Equity Ratio of 0.20 and Long Term Debt/Equity Ratio of 0.19 and 5-Year Projected Earnings Per Share Growth Rate of 25.60%. The short interest was 1.85% as of 05/17/2012. Fortune Brands Home & Security, Inc. provides home and security products for use in residential home repair, remodeling, new construction, and security and storage applications. The company's Kitchen and Bath Cabinetry segment manufactures custom, semi-custom, and stock cabinetry for the kitchen, bath, and other parts of the home in North America. This segment offers its products under the brand names Aristokraft, Omega, Kitchen Craft, Schrock, Diamond, HomeCrest, Decor, Kemper, Thomasville, Martha Stewart Living, Kitchen Classics, and Reflections.
3) Harman International Industries Inc. (HAR)
Harman International Industries Inc. has a Debt/Equity Ratio of 0.24 and Long Term Debt/Equity Ratio of 0.00 and 5-Year Projected Earnings Per Share Growth Rate of 31.00%. The short interest was 2.38% as of 05/17/2012. Harman International Industries, Incorporated engages in the development, manufacture, and marketing of audio products and electronic systems primarily in the United States, Germany, and other parts of Europe. Its Automotive segment offers audio, electronic, and infotainment systems for vehicle applications to be installed primarily as original equipment by automotive manufacturers under the JBL, Infinity, Mark Levinson, Harman/Kardon, Logic 7, Lexicon, and Becker brand names. This segment also develops, manufactures, sells, and services audio systems under the Bowers & Wilkins brand name; and produces Harman/Kardon branded infotainment systems for Harley-Davidson touring motorcycles. The company's Consumer segment provides a range of audio and consumer electronics for home, multimedia, and mobile applications under the AKG, Harman/Kardon, Infinity, JBL, Mark Levinson, and Selenium brand names.
4) Green Mountain Coffee Roasters Inc. (GMCR)
|Industry:||Processed & Packaged Goods|
Green Mountain Coffee Roasters Inc. has a Debt/Equity Ratio of 0.21 and Long Term Debt/Equity Ratio of 0.20 and 5-Year Projected Earnings Per Share Growth Rate of 32.63%. The short interest was 23.81% as of 05/17/2012. Green Mountain Coffee Roasters, Inc. engages in the specialty coffee and coffee maker business. The company sources, produces, and sells approximately 200 varieties of coffee, cocoa, teas, and other beverages in K-Cup portion packs and coffee in traditional packaging, including whole bean and ground coffee selections in bags and ground coffee in fractional packs for use in at-home (AH) and away-from-home (AFH). It sells its products primarily in North America through supermarkets, club stores, and convenience stores; in restaurants and hospitality; and to office coffee distributors, as well as directly to consumers through its Website.
*Company profiles were sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.