Zacks Investment Research #1 Rank (strong buy) stocks have consistently outperformed the S&P 500 since 1988. Here are some their recommended Growth and Income stock picks with a #1 ranking. This list is updated daily.
MSA - Growth & Income
Fri, 18 May 2012
MSA (MSA) delivered record first quarter revenue and earnings on April 25, prompting analysts to revise their estimates significantly higher for both 2012 and 2013.
It is a Zacks #1 Rank (Strong Buy) stock.
The company also recently announced another dividend increase as earnings continue to grow. It currently yields 2.7%.
Safety First
MSA (which stands for Mine Safety Appliances) manufactures safety products for a wide range of industries. Some of its products include: respirators, gas detection instruments, thermal imaging cameras, fire helmets, ballistic helmets, fall protection, and mining products.
MSA was founded in 1914 and is headquartered in Pittsburgh. It has a market cap of $1.6 billion.
First Quarter Results
MSA reported strong first quarter results on April 25. Earnings per share came in at 64 cents, beating the Zacks Consensus Estimate of 51 cents. It was an 81% increase over the same quarter last year.
Net sales rose 6% year-over-year to $293 million, ahead of the Zacks Consensus Estimate of $289 million. Revenue from the company's five core product groups, Industrial Head Protection, Fall Protection Devices, Portable Gas Detectors, Fixed Flame & Gas Detection Systems, and Self-Contained Breathing Apparatus (SCBA), increased 16%.
Meanwhile, the operating margin expanded 410 basis points year-over-year as the company leveraged its fixed expenses. This led to a whopping 72% in operating income over the same period.
Estimates Rising
Earnings estimates soared for MSA following the Q1 beat, sending the stock to a Zacks #1 Rank (Strong Buy) stock.
The Zacks Consensus Estimate for 2012 is now $2.64, representing 24% growth over 2011 EPS. The 2013 consensus estimate is currently $3.03, corresponding with 15% growth.
Analysts believe that continued solid global sales growth and a high degree of operating leverage will drive double-digit EPS growth over the next few years.
Dividend Rising
MSA also recently announced an 8% increase in its quarterly dividend. Since 2000, the company has raised it at a compound annual rate of 18%.
It currently yields 2.7%.
Reasonable Valuation
Shares of MSA have soared 24% since I last wrote about it on January 17, but the valuation picture still looks reasonable.
The stock trades at 15x 12-month forward earnings, a discount to its 10-year median of 18x.
The Bottom Line
With rising estimates, strong growth prospects, a solid 2.7% yield and reasonable valuation, MSA still offers attractive total return potential.
Read the January 25 article here.
This Week's Growth & Income Zacks Rank Buy Stocks:
Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASR), or Southeast Airport Group, recently delivered strong first quarter results driven by a strong increase in passenger traffic. Earnings estimates have been steadily rising as a result, sending the stock to a Zacks #1 Rank (Strong Buy) stock. In addition to strong earnings growth, the company pays a dividend that yields a juicy 3.9%. Read the full article.
Estimates have been rising for Magna International Inc. (MGA) after the company delivered both a revenue and earnings beat on May 10. It is a Zacks #1 Rank (Strong Buy) stock. The company also pays a dividend that yields a solid 2.6%. And valuation is attractive too, with shares sporting a PEG ratio of only 0.8. Read the full article.
UMB Financial Corporation (UMBF) recently delivered better than expected first quarter results, driven by strong fee-based income and solid credit quality. Estimates have been rising off the strong quarter, sending the stock to a Zacks #1 Rank (Strong Buy). Unlike many of its peers, UMB has been steadily raising its dividend over the last decade - even during the financial crisis. It currently yields 1.7%. Read the full article.
Estimates have been rising for Cinemark Holdings, Inc. (CNK) thanks to strong first quarter earnings and a record-breaking opening for The Avengers movie. It is a Zacks #2 Rank (Buy) stock.
Based on consensus estimates, analysts project solid double-digit earnings growth for Cinemark over the next two years. On top of this, the company pays a dividend that yields a solid 3.5%. Read the full article.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.
MINE SAFETY APP (MSA): Free Stock Analysis Report
MINE SAFETY APP (MSA): Free Stock Analysis Report
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Grupo Aeroportuario del Sureste, S.A.B. de C.V. - Growth & Income
Thu, 17 May 2012
Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASR), or Southeast Airport Group, recently delivered strong first quarter results driven by a strong increase in passenger traffic.
Earnings estimates have been steadily rising as a result, sending the stock to a Zacks #1 Rank (Strong Buy) stock. Based on current consensus estimates, analysts expect 21% EPS growth this year and 12% growth next year.
On top of this growth, the company pays a dividend that yields a juicy 3.9%.
Mexican Monopoly
Southeast Airport Group is a Mexican airport operator with concessions to operate, maintain and develop the airports in tourist-heavy southeast Mexico, including Cancún, Veracruz and Cozumel.
The company was formed in 1998 after the Mexican government decided to privatize some of its airports. The company has experienced strong and relatively steady revenue and profit growth since then as it essentially has a monopoly on the airports in southeast Mexico.
First Quarter Results
Southeast Airport Group delivered strong first quarter results on April 24. Earnings per share came in at $1.40, beating the Zacks Consensus Estimate of $1.26. It was a 29% increase over the same quarter in 2011.
Total revenues soared 21% year-over-year, driven by a 10% increase in passenger traffic. The number of domestic passengers grew 20% while the number of international passengers rose 6%.
Operating income increased 25% as the company leveraged its fixed expenses. The operating margin for Q1 was a remarkable 56.7%, up from 54.8% in the same quarter last year.
Estimates Rising
Estimates have been marching higher following Southeast Airport Group's strong Q1 results, sending the stock to a Zacks #1 Rank (Strong Buy) stock.
The Zacks Consensus Estimate for 2012 is now $4.61, representing 21% growth over 2011 EPS. The 2013 consensus estimate is currently $5.19, corresponding with 12% growth.
As you can see in the Price & Consensus chart, consensus estimates have been soaring, along with the stock price, over the last several months:
Strong Dividend
On top of strong growth, Southeast Airport Group offers a dividend that yields a solid 3.9%. The company pays an annual dividend based on its annual net retained earnings. In May 2012, it paid a dividend of $2.76 per share, up from $2.55 in 2011.
Reasonable Valuation
Shares of ASR are up 38% since I first wrote about it back on September 21. But the valuation picture still looks reasonable.
Shares trade at 15.6x 12-month forward earnings, a discount to its 10-year median of 17.4x. Its price to book ratio of 1.7 is in-line with its peers.
The Bottom Line
With a virtual monopoly on the airports in a tourist-heavy region of Mexico, Southeast Airport Group should deliver strong earnings growth for many years. With rising earnings estimates, a fat dividend yield and reasonable valuation, this stock offers attractive total return potential.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.
GRUPO AEROP-ADR (ASR): Free Stock Analysis Report
GRUPO AEROP-ADR (ASR): Free Stock Analysis Report
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Magna International Inc. - Growth & Income
Wed, 16 May 2012
Estimates have been rising for Magna International Inc. (MGA) after the company delivered both a revenue and earnings beat on May 10. It is a Zacks #1 Rank (Strong Buy) stock.
The company also pays a dividend that yields a solid 2.6%. And valuation is attractive too, with shares sporting a PEG ratio of only 0.8.
Company Description
Magna International Inc. is one of the largest diversified auto parts suppliers in the world. Geographically, its sales were divided as follows in the first quarter of 2012:
North America: 53%
Europe: 41%
Rest of World: 6%
The company was founded in 1961 and is headquartered in Aurora, Ontario, Canada. It has a market cap of $10.0 billion.
First Quarter Results
Magna International delivered strong first quarter results on May 10. Earnings per share came in at $1.46, beating the Zacks Consensus Estimate of $1.30. It was a 12% increase over the same quarter last year.
Net sales rose 7% to $7.666 billion, ahead of the Zacks Consensus Estimate of $7.375 billion. Sales increases in North America (+10%), Europe (+6%), and the rest of the world (+29%) were partially offset by decreases in complete vehicle assembly sales (-11%) and tooling, engineering and other sales (-7%).
Gross profit expanded from 12.2% to 12.9% of sales in the quarter, which helped drive a 10% increase in operating income.
Estimates Rising
Magna expects 2012 revenue between $29.0 and $30.5 billion, driven by light vehicle production of 14.4 million units in North America and 12.7 million units in Western Europe. This bullish outlook prompted analysts to revise their estimates significantly higher. It is now a Zacks #1 Rank (Strong Buy) stock.
The Zacks Consensus Estimate for 2012 is now $4.86, representing 8% growth over 2011 EPS. The 2013 consensus estimate is currently $5.53, corresponding with 14% EPS growth.
2.6% Yield
In addition to strong earnings growth, the company offers a dividend that yields a solid 2.6%. The company did cut its dividend during the Great Recession, but it has raised it 4 times since then. Its quarterly dividend of 27.5 cents per share is above its pre-cut high of 19 cents.
Reasonable Valuation
The valuation picture looks very reasonable for Magna. Shares trade at just 8.3x 12-month forward earnings, below the industry median of 9.7x and its 10-year median of 10.2x.
Its PEG ratio is 0.8 based on a consensus long-term growth rate of 10.3%.
Magna's price to sales ratio of 0.3 is also below both the peer group multiple and its historical multiple.
The Bottom Line
With rising estimates, strong growth projections, a 2.6% yield and very reasonable valuation, Magna International offers attractive total return potential.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.
MAGNA INTL CL A (MGA): Free Stock Analysis Report
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UMB Financial Corporation - Growth & Income
Tue, 15 May 2012
UMB Financial Corporation (UMBF) recently delivered better than expected first quarter results, driven by strong fee-based income and solid credit quality.
Estimates have been rising off the strong quarter, sending the stock to a Zacks #1 Rank (Strong Buy).
Unlike many of its peers, UMB has been steadily raising its dividend over the last decade - even during the financial crisis. It currently yields 1.7%.
Company Description
UMB Financial Corporation is a financial services company primarily offering banking and asset management services.
It is headquartered in Kansas City, Missouri and was founded in 1913. It has a market cap of $1.9 billion.
First Quarter Results
UMB Financial delivered better than expected first quarter results on April 24. Earnings per share came in at $1.15, crushing the Zacks Consensus Estimate of $0.61. Excluding certain one-time items, "core" EPS was around $0.76, still easily beating the consensus.
Net interest income declined 1% year-over-year, but this was more than offset by a 6% increase adjusted non-interest income. Trust & Securities Processing, which made up 41% of non-interest income, increased 6%. Overall, non-interest accounted for 63% of total revenue for the quarter.
The company also recorded its 8th consecutive quarter of loan growth, driven by a 21% increase in commercial loans. And credit quality remained strong, with non-performing loans representing just 0.50% of total loans, well below the industry average around 3.4%.
Estimates Rising
Earnings estimates jumped higher for both 2012 and 2013 following solid Q1 results, sending the stock to a Zacks #1 Rank (Strong Buy) stock.
The Zacks Consensus Estimate for 2012 is now $3.10, representing 12% growth over 2011 EPS. The 2013 consensus is a couple pennies higher at $3.12.
Dividend
Unlike many of its peers, UMB did not cut its dividend during the financial crisis of 2008-2009. In fact, the company actually raised it twice in 2008 and then again in 2009:
It currently yields a solid 1.7%.
Valuation
The valuation picture looks reasonable for UMB with shares trading at 15x 12-month forward earnings. That's a premium to the industry median of 13x, but a discount to its 10-year median of 19x.
Its price to book ratio of 1.6 is in-line with the group and its historical multiple.
The Bottom Line
With a growing loan portfolio, strong fee-based income, solid credit quality, a 1.7% yield and reasonable valuation, UMB Financial offers investors a lot to like.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.
UMB FINL CORP (UMBF): Free Stock Analysis Report
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Cinemark Holdings, Inc. - Growth & Income
Mon, 14 May 2012
Estimates have been rising for Cinemark Holdings, Inc. (CNK) thanks to strong first quarter earnings and a record-breaking opening for The Avengers movie.
It is a Zacks #2 Rank (Buy) stock.
Based on consensus estimates, analysts project solid double-digit earnings growth for Cinemark over the next two years. On top of this, the company pays a dividend that yields a solid 3.5%.
Company Description
Cinemark Holdings operates 459 theatres with 5,181 screens in 39 U.S. states, Brazil, Mexico, Argentina and 10 other Latin American countries.
Cinemark Holdings is headquartered in Plano, Texas and has a market cap of $2.7 billion.
First Quarter Results
Cinemark Holdings reported strong first quarter results on May 7. Earnings per share came in at 37 cents, beating the Zacks Consensus Estimate by 3 cents. It was a stellar 68% increase over the same quarter last year.
Revenues rose 20% to $578.8 million, ahead of the Zacks Consensus Estimate of $569.0 million. Admissions revenues increased 20% while concessions rose 23%. Attendance was up 14% over the same quarter last year, thanks to a strong North American box office.
Meanwhile, operating income surged 84% as the company leveraged its fixed expenses.
Estimates Rising
Following strong first quarter results and the record breaking The Avengers openings in the U.S. and Latin America, analysts have revised their estimates higher for both 2012 and 2013, sending the stock to a Zacks #2 Rank (Buy).
Based on consensus estimates, analysts expect strong growth over the next couple of years. The 2012 Zacks Consensus Estimate is now $1.63, representing 33% growth over 2011 EPS. The 2013 consensus is currently $1.80, corresponding with 10% growth.
Dividend
On top of strong growth, the company pays a dividend that yields a solid 3.5%.
Cinemark has paid the same 21 cent per share quarterly dividend since 2010. But if earnings continue to grow at a healthy clip, look for that dividend to rise in the future.
Valuation
Valuation looks reasonable with shares trading at 14.4x 12-month forward earnings, in-line with its 10-year median. Its price to sales ratio of 1.2 is well below the industry median of 1.5.
The Bottom Line
With rising estimates, solid growth projections, a 3.5% yield and reasonable valuation, Cinemark Holdings offers attractive total return potential.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.
CINEMARK HLDGS (CNK): Free Stock Analysis Report
CINEMARK HLDGS (CNK): Free Stock Analysis Report
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