Over the past three years, the company’s earnings have been growing at a nice clip along with its sales. Thus, it handily manages a gross margin greater that 30%. Its current ratio crushes the industry’s median, and its $48 million worth of cash and cash equivalents acts as a safety cushion for turbulent times. Overall, with 3-year stock returns standing at over 70% and steadily increasing cash distributions, Raven Industries could be a stock for the long haul.
At the moment, it is trading about 25% off of its 52-week range of $33.47, and a price-to-earnings ratio slightly below its 10-year average of 21. The current dividend yield of 1.50% might look insignificant, but the company has been increasing its dividends for 26 consecutive years. Also, the relatively healthy payout ratio of 41% suggests that there is room for dividend growth in the future.
National-Oilwell Varco, Inc. (NYSE:NOV)
National-Oilwell Varco, Inc. (NYSE:NOV) is a worldwide leader in supplying all the equipment necessary for oil and gas drillers to operate, and perhaps the safest bet in the energy sector.
The company outshines its peers in terms of market penetration, as its equipment can be found on roughly 90% of the world’s oil rigs. At the same time, its immense $12 billion backlog in the Rig Technology segment-its most profitable business- underlies the strong demand prospects for its key products. It is worth mentioning that, between 2010 and 2012, rig technology orders almost tripled, reaching more than $9 billion.
Overall, National-Oilwell Varco, Inc. (NYSE:NOV) seems to hold all the aces: juicy 3-year stock returns greater than 50%, robust annual top and bottom line growth, and a gross margin higher than 30%. Also, the company’s strong balance sheet provides a quick glimpse of its ability to pay its bills; its current assets far exceed its current liabilities, and its long-term debt remains perfectly manageable.
Finally, with a price-to-earnings ratio way lower than the industry’s average same ratio of 18.8, it seems fetchingly priced. Analysts tracked by Wall Street Journal take a bullish stance on the stock, with the majority of them giving it a “buy” rating. The average target price of $85.32 shows a more than 25% upside potential.
Final Thoughts
Do-it-yourself investors can find their way through the Wall Street maze just by employing a simple stock screener. Setting the right criteria will save you a whole lot of time while searching for a stock that fits your portfolio.
All of the above mentioned companies that resulted from my recent test make a case for a possible investment opportunity. Overall, clean balance sheets, nifty revenue and earnings growth performance, and hefty gross margins paint a pretty lucrative picture.
The article Finding Your Way Through the Wall Street Maze originally appeared on Fool.com and is written by Fani Kelesidou.
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