As investors know, when earnings grow price will follow. Consistent earnings growth is the hallmark of companies that increase shareholder value over the long term. This list of companies are rated 4 or 5-stars by S&P and have an A rating for earnings and dividends. These companies are also exploding their earnings in the trailing period and increasing EPS for the next year. The strong earnings growth makes these stocks a great addition to long term portfolios.
A.O. Smith Corporation (AOS) is one of the world's leading manufacturers of residential and commercial water heating equipment and boilers, offering a comprehensive line featuring the best-known brands in North America and China, as well as water purification products for residential and light commercial applications. AOS announced first quarter net earnings of $47.5 million or $1.02 per share on a 12 percent increase in revenue. The net earnings were $23.3 million higher than the $24.2 million or $.52 per share earned from continuing operations in the first quarter of 2011. This is an increase of 96% in Q1 earnings from Q1 2011. AOS is projected to have EPS growth of 16.5% next year. AOS is up 16% year to date. AOS has a dividend yield of 1.36% following a 15% dividend hike in the past year. AOS has an equity summary score of 7.1 out of 10 for a Bullish outlook.
Engine maker Cummins Inc. (CMI) announced first-quarter earnings rose 33%, as surging sales of the company's truck engines in North America offset weakening demand for engines in China and Brazil. The company's sales and profit have been soaring lately on rising demand for its commercial truck engines in North America. The company reported that first-quarter revenue from the region increased 40% from a year earlier. Overall for the first quarter, Cummins reported a profit of $455 million, or $ 2.38 a share, up from $343 million, or $1.75 a share, a year earlier. This is an EPS increase of 36% compared to Q1 2011. CMI is projected to have EPS growth of 12% next year. CMI is up 8% year to date. CMI has a dividend yield of 1.67% following a 52% dividend hike in the past year. CMI has an equity summary score of 9.4 out of 10 for a VERY Bullish outlook.
Cintas Corp.'s (CTAS) fiscal third-quarter earnings rose 29% as the uniform and business-supplies company continued to see strong revenue growth at its uniform rentals business. For the year, the company again raised its per-share earnings estimate to $ 2.24 to $2.27 on revenue of $4.09 billion to $4.12 billion, from its December estimate for $2.16 to $2.20 and$4.08 billion to $4.13 billion. CTAS has continued to notch double-digit profit increases in recent quarters for the past year thanks to its corporate customers' continuing demand for apparel and other supplies. For the quarter ended Feb. 29, CTAS reported a profit of $76 million, or 58 cents a share, up from $59.1 million, or 41 cents a share, a year earlier. This is an EPS increase of 41% compared to Q1 2011. CTAS is projected to have EPS growth of 12% next year. CTAS is up 3.5% year to date. CTAS has a dividend yield of 1.5% following a 10% dividend hike in the past year. CTAS has an equity summary score of 8.7 out of 10 for a Bullish outlook.
The largest U.S. auto parts retail chain AutoZone Inc.'s (AZO) quarterly profit beat market expectations on better margins, but sales growth slowed. AZO reported domestic same-store sales increased about 4 percent for the third quarter, compared with a growth of over 5 percent a year earlier. Sales rose 7 percent to $2.11 billion. Net income rose to $248.6 million, or $6.28 per share, from $227.4 million, or $5.29 per share, a year earlier. This is an EPS increase of 19% compared to Q1 2011. AZO is projected to have EPS growth of 14% next year. AZO is up 5.8% year to date. AZO has an equity summary score of 9.0 out of 10 for a VERY Bullish outlook.
Pharmaceutical wholesaler McKesson Corp (MCK) reported a higher quarterly profit on a 10 percent rise in sales from its core drugs distribution business, and it issued an earnings forecast for fiscal 2013 in line with Wall Street estimates. MCK posted a net profit of $521 million, or $2.09 per share, for its fiscal fourth quarter ended March 31, compared with a profit of $422 million, or $1.62 per share, a year ago. This is an EPS increase of 29% compared to Q1 2011. MCK is projected to have EPS growth of 11% next year. MCK is up 13% year to date. MCK has a dividend yield of 0.9% following a 11% dividend hike in the past year. MCK has an equity summary score of 9.1 out of 10 for a VERY Bullish outlook.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.