Five By Five Stock Screens

6/16/2014


We're nearing the year's halfway marker, a popular, if somewhat arbitrary, time to tidy up your stock portfolio. For investors seeking to plug holes that may have developed since their last major portfolio review, we present five shopping lists that include some of our top picks based on long-term track record, recent operating momentum, outlook, value, and dividends.

Long-term growth leaders

Listed below are recommended stocks with scores above 80 for Quadrix Quality, reflecting outstanding long-term track records. Each has produced five-year annualized growth of at least 10% for sales, per-share profits, and cash from operations. While such aggressive growth isn't always a sign of good things to come, these companies are projected to keep growing per-share profits at a double-digit pace over the next five years. All five stocks also score at least 70 in Quadrix for earnings predictablity and returns on assets, equity, and investment.

5-Year Annualized Growth Rate
Est. 5-Yr.
Annual.
EPS
Growth
(%)
Quadrix
Quality
Score
Company (Price; Ticker)
Sales
(%)
EPS
(%)
Operating
Cash Flow
(%)
Apple ($94; AAPL)
44
39
27
12
98
Cognizant Tech. ($47; CTSH)
23
26
22
18
98
CVS Caremark ($78; CVS)
11
10
10
13
82
Google ($568; GOOGL)
19
18
15
17
95
Union Pacific ($102; UNP)
17
12
15
15
92

Momentum leaders

The five stocks below, with scores above 80 for Quadrix Momentum, have posted double-digit growth in per-share earnings, sales, and cash provided by operations over the past 12 months. All five also topped consensus profit and sales estimates in the latest quarter.

------------- 12-Month Growth -------------
Company (Price; Ticker)
Sales
(%)
EPS
(%)
Operating
Cash Flow
(%)
Quadrix
Momentum
Score
EOG Resources ($109; EOG)
27
218
46
98
Magna Int'l ($107; MGA)
12
36
36
93
Packaging Corp. ($71; PKG)
48
63
42
90
SanDisk ($97; SNDK)
22
164
89
92
Skyworks ($47; SWKS)
12
32
61
95

Outlook leaders

The following recommended stocks score above 80 for Quadrix Earnings Estimates. All are projected to grow per-share profits by more than 10% in both the current quarter and the current fiscal year. Analyst estimates for both the quarter and the year are trending upward, and all five companies are projected to outgrow their respective S&P 500 sector indexes.

-- Est. EPS Growth --
90-Day Change In
--- Profit Estimate ---
Quadrix
Earnings
Estimates
Score
Company (Price; Ticker)
Current
Quarter
(%)
Current
Year
(%)
Current
Quarter
(%)
Current
Year
(%)
Alaska Air Group ($99; ALK)
36
32
5
10
91
B/E Aerospace ($94; BEAV)
20
24
1
1
82
Kroger ($48; KR)
14
13
1
1
92
ManpowerGroup ($86; MAN)
27
17
10
8
93
Whiting Petroleum ($74; WLL)
12
12
17
13
91

Value leaders

The stocks below score above 75 for Quadrix Value; most look cheap on an absolute and relative basis as measured by several different valuation ratios. All trade at a discount relative to their peers for at least two of the three factors shown below, and to their own five-year averages. Reflecting their all-around cheapness, all five also score in the top half of our research universe for more than 45% of factors that comprise their Value scores.

Discount To
5-Yr. Avg.
Trailing
P/E Ratio
(%)
--- Discount to Industry Median ---
------- P/E Ratio -------
Price/
OCF
(%)
Quadrix
Value
Score
Company (Price; Ticker)
Trailing
(%)
Forward
(%)
Capital One Fin'l ($82; COF)
1
3
15
69
87
Cisco Systems ($25; CSCO)
18
37
29
30
85
Foot Locker ($50; FL)
22
15
11
5
78
J.P. Morgan ($58; JPM)
15
27
21
NA
93
Magna Int'l ($107; MGA)
7
26
25
43
80

Dividend leaders

The income plays below boast yields above 2.0%. More importantly, they have shown a propensity to aggressively grow the dividend, with the latest hike of at least 10% and three-year annualized growth above 25%. The dividend payout ratio reflects the indicated year-ahead dividend as a percentage of trailing earnings. Four of the five have generated higher 12-month free cash flow. The exception? Wells Fargo ($53; WFC), which like most banks does not report this metric.

Company (Price; Ticker)
Indicated
Dividend
($)
Yield
(%)
Last Div.
Hike
(%)
3-Year
Ann. Div.
Growth
(%)
Div.
Payout
Ratio
(%)
Dow Chemical ($53; DOW)
1.48
2.8
15
29
57
Helmerich & Payne ($112; HP)
2.75
2.5
10
98
47
Packaging Corp. ($71; PKG)
1.60
2.3
28
36
43
Qualcomm ($79; QCOM)
1.68
2.1
20
23
38
Wells Fargo ($53; WFC)
1.40
2.7
17
64
36

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