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3 Profitable S&P 500 Stocks With Room to Run: NOW, BSX, COO
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The beginning of this month saw choppy trading sessions for equities, with the S&P 500 recording its worst day on Aug 5 since 2022. However, the S&P 500 bounced back last week after positive economic reports on retail sales and initial jobless claims quelled recession apprehensions. The broader index has now notched its eighth straight winning streak on Aug 19 for the first time in 2024.
Hence, it is prudent for investors to place bets on profitable and not loss-making stocks of the S&P 500. These stocks are well-poised to make the most of the broader index’s upward trajectory since they consistently offer solid returns after meeting all operating and non-operating expenses.
Here, we have used the concept of accounting ratios to gauge a company’s profitability. There are more than a few profitability ratios, from which we have chosen the most successful and often used metric to determine a company’s bottom-line performance.
To that end, ServiceNow, Inc. (NOW - Free Report) , Boston Scientific Corporation (BSX - Free Report) , and The Cooper Companies, Inc. (COO - Free Report) have been selected as the top picks with a high net income ratio.
Net Income Ratio
The net income ratio gives us the exact profitability level of a company. It reflects the percentage of net income to total sales revenues. Using the net income ratio, one can determine a firm’s effectiveness in meeting operating and non-operating expenses from revenues. A higher net income ratio usually implies a company’s ability to generate ample revenues and successfully manage all business functions.
Screening Parameters Using Research Wizard:
The net income ratio is not the only indicator of future winners. So, we have added a few more criteria to arrive at a winning strategy.
Zacks Rank Less than or equal to 2: Whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Trailing 12-Month Sales and Net Income Growth Higher than X Industry: Stocks that have witnessed higher-than-industry sales and net income growth in the past 12 months are positioned to perform well.
Trailing 12-Month Net Income Ratio Higher than X Industry: A high net income ratio indicates a company’s solid profitability.
Percentage Rating Strong Buy greater than 70: This indicates that 70% of the current broker recommendations for the stock are Strong Buy.
These few parameters have narrowed the universe of more than 7,685 stocks to only 35.
Here are three of the 35 stocks that qualified for the screening:
ServiceNow
ServiceNow provides cloud computing services. The 12-month net profit margin of NOW is 11.5%.
The company’s expected earnings growth rate for the current year is 28.1%. ServiceNow currently has a Zacks Rank #1.
Boston Scientific
Boston Scientific manufactures medical devices and products. The 12-month net profit margin of BSX is 12%.
The company’s expected earnings growth rate for the current year is 17.1%. Boston Scientific presently has a Zacks Rank #2.
Cooper Companies
Cooper Companies is a specialty medical device company. The 12-month net profit margin of COO is 9.1%.
The company’s expected earnings growth rate for the current year is 11.6%. Cooper Companies at present has a Zacks Rank #2.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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3 Profitable S&P 500 Stocks With Room to Run: NOW, BSX, COO
The beginning of this month saw choppy trading sessions for equities, with the S&P 500 recording its worst day on Aug 5 since 2022. However, the S&P 500 bounced back last week after positive economic reports on retail sales and initial jobless claims quelled recession apprehensions. The broader index has now notched its eighth straight winning streak on Aug 19 for the first time in 2024.
Hence, it is prudent for investors to place bets on profitable and not loss-making stocks of the S&P 500. These stocks are well-poised to make the most of the broader index’s upward trajectory since they consistently offer solid returns after meeting all operating and non-operating expenses.
Here, we have used the concept of accounting ratios to gauge a company’s profitability. There are more than a few profitability ratios, from which we have chosen the most successful and often used metric to determine a company’s bottom-line performance.
To that end, ServiceNow, Inc. (NOW - Free Report) , Boston Scientific Corporation (BSX - Free Report) , and The Cooper Companies, Inc. (COO - Free Report) have been selected as the top picks with a high net income ratio.
Net Income Ratio
The net income ratio gives us the exact profitability level of a company. It reflects the percentage of net income to total sales revenues. Using the net income ratio, one can determine a firm’s effectiveness in meeting operating and non-operating expenses from revenues. A higher net income ratio usually implies a company’s ability to generate ample revenues and successfully manage all business functions.
Screening Parameters Using Research Wizard:
The net income ratio is not the only indicator of future winners. So, we have added a few more criteria to arrive at a winning strategy.
Zacks Rank Less than or equal to 2: Whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Trailing 12-Month Sales and Net Income Growth Higher than X Industry: Stocks that have witnessed higher-than-industry sales and net income growth in the past 12 months are positioned to perform well.
Trailing 12-Month Net Income Ratio Higher than X Industry: A high net income ratio indicates a company’s solid profitability.
Percentage Rating Strong Buy greater than 70: This indicates that 70% of the current broker recommendations for the stock are Strong Buy.
These few parameters have narrowed the universe of more than 7,685 stocks to only 35.
Here are three of the 35 stocks that qualified for the screening:
ServiceNow
ServiceNow provides cloud computing services. The 12-month net profit margin of NOW is 11.5%.
The company’s expected earnings growth rate for the current year is 28.1%. ServiceNow currently has a Zacks Rank #1.
Boston Scientific
Boston Scientific manufactures medical devices and products. The 12-month net profit margin of BSX is 12%.
The company’s expected earnings growth rate for the current year is 17.1%. Boston Scientific presently has a Zacks Rank #2.
Cooper Companies
Cooper Companies is a specialty medical device company. The 12-month net profit margin of COO is 9.1%.
The company’s expected earnings growth rate for the current year is 11.6%. Cooper Companies at present has a Zacks Rank #2.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.