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7 US frontrunners in annual profit growth
29
Jun
7 US frontrunners in annual profit growth

 

We have compiled a ranking of US companies with the most significant annual profit growth. All of them meet the following conditions:

— The company’s latest quarterly financial report in 2017 shows strong annual profit growth (compared to other companies in the market). Annual profit growth, as seen from the quarterly report, determines the company’s place in the rating.

— The company’s profit for 2016 exceeded its profit for 2015 by at least 50%. That means the quarterly growth in profits is not accidental.

— A market cap of at least $300M.

— A P/E ratio of not more than 30. That means the shares are not overpriced, and there’s almost no risk for investors to find themselves in a bubble.

The review is based on data from http://www.msn.com/en-us/money/stockscreener and https://www.google.com/finance. The stock charts use the currencies of the respective exchanges. The companies’ earnings and turnover are shown in US dollars. The $ symbol stands for the US dollar only.

1. B. Riley Financial

B. Riley Financial logo

— Symbol: RILY

— Exchange: NASDAQ

— Market cap: $351M

— Annual turnover: $190M

— P/E: 9.7

— Dividend yield: 1.5%

— Share price change YoY: +80%

— Quarterly profit change YoY: +5550%

— Annual profit change in 2015–2016: +82%

— Annual turnover change YoY: 165%

Description. An investment bank providing a wide range of services. The bank conducts auctions, provides evaluation and liquidation services, and invests in various assets. The bank also cooperates with a large network of financial agents.

Chart. B. Riley shares hit an all-time high in 2009, but then collapsed. However, the stock began to climb up again since 2012, and seen significant growth at the end of 2016. The company pays dividends since 2014, without any strict schedule.

Pros. Largest five-year profit growth in this review, excellent turnover growth, descent share price growth, low P/E ratio.

Cons. Low dividend.

2. Eagle Pharmaceuticals

Scientists

— Symbol: EGRX

— Exchange: NASDAQ

— Market cap: $1.3B

— Annual turnover: $189M

— P/E: 13

— Dividend yield:  −

— Share price change YoY: +125%

— Quarterly profit change YoY: +4600%

— Annual profit change in 2015–2016: +3070%

— Annual turnover change YoY: 346%

Description. A pharmaceutical company developing chemotherapy drugs and medications used in resuscitation. The company’s main brands are Argatroban, Ryanodex, Bendeka, and Bendamustine; a number of other drugs are being tested.

Chart. The company is relatively new to the market. In 2014, its shares were very cheap, but in 2015 the price soared 10-fold to a record high. It fell slightly in 2016, but now the shares are trading near an all-time high again.

Pros. Impressive growth in both quarterly and annual profits (the only company in this review with such a combination), the biggest turnover and stock price growth, relatively low P/E ratio.

Cons. No dividend, short track record.

3. National Bank Holdings

Community Banks of Colorado Signboard

— Symbol: NBHC

— Exchange: NYSE

— Market cap: $840M

— Annual turnover: $160M

— P/E: 29

— Dividend yield: 1.1%

— Share price change YoY: +59%

— Quarterly profit change YoY: +3190%

— Annual profit change in 2015–2016: +372%

— Annual turnover change YoY: −6%

Description. National Bank Holdings operates as the bank holding company for NBH Bank. The bank has various subsidiaries in different states: Bank Midwest in Missouri and Kansas, Community Banks of Colorado in Colorado, Hillcrest Bank in Texas. NBH and its subsidiaries provide various banking products and financial services to commercial and consumer clients.

Chart. The company’s shares have low volatility. For several years they fluctuated in the range of $18–22, but gradually raised to $33 in 2016. The stock still trades close to an all-time high. The company pays dividend quarterly. The dividend yield has almost doubled in 2016–2017, but remains relatively small.

Pros.Huge growth in quarterly profits, excellent annual profit growth, significant increase in share price.

Cons. Decrease in turnover, low dividends, highest P/E ratio in the review.

4. Newell Brands

Parker Pen

— Symbol: NWL

— Exchange: NYSE

— Market cap: $26B

— Annual turnover: $13B

— P/E: 23

— Dividend yield: 1.7%

— Share price change YoY: +14%

— Quarterly profit change YoY: +1480%

— Annual profit change in 2015–2016: +104%

— Annual turnover change YoY: +148%

Description. Newell Brands is a leading global marketer of consumer and commercial products with a vast portfolio of brands including everything from food storage to bicycles. The company has a long history. It began operations in 1903 as a curtain rails manufacturer, and it has been trading on stock exchange since 1972. Some Newell brands are well known outside the United States, i.e. Parker pens.

Chart. Newell Brands has a long track record, and it’s impossible to fit all of it on the chart. Like many other companies, it has seen its shares hitting an all-time high in 2007, followed by a 4-fold collapse. The stock recovered only in 2013, but in general there is a stable positive trend since 2009. The company pays dividend quarterly.

Pros. Huge growth in quarterly profits, excellent turnover and annual profit growth, long long track record, stable positive share-price trend.

Cons. Relatively high P/E ratio, low dividends.

5. Evercore Partners

Evercore Partners office

— Symbol: EVR

— Exchange: NYSE

— Market cap: $3.2B

— Annual turnover: $1.5B

— P/E: 17

— Dividend yield: 1.9%

— Share price change YoY: +52%

— Quarterly profit change YoY: +1420%

— Annual profit change in 2015–2016: +151%

— Annual turnover change YoY: +172%

Description. A global investment banking advisory firm. The company advises its clients on mergers and acquisitions, restructurings, financings, and other strategic transactions, and also provides asset management services. Most Evercore clients are transnational corporations operating complex financial schemes.

Chart. The company’s stock quotes are available since 2006, when the shares soared to $40, but then fell 5-fold in 2007–2008. However, the stock completely recovered in 2009. In 2010-2012, the company’s shares price fluctuated in the range of $21–38, but then in 2013 it has seen a rapid growth to the $60 mark. The growth continued in 2016–2017, when the stock hit an all-time high of $81.The company pays stable quarterly dividend.

Pros. Huge growth in quarterly profits, excellent turnover and annual profit growth.

Cons. Low dividends.

6. Columbia Property Trust

Columbia Property project

— Symbol: CXP

— Exchange: NYSE

— Market cap: $2.7B

— Annual turnover: $474B

— P/E: 18

— Dividend yield: 3.6%

— Share price change YoY: +4%

— Quarterly profit change YoY: +1020%

— Annual profit change in 2015–2016: +89%

— Annual turnover change YoY: −35%

Description. A real estate investment trust focused on office properties. The company operates mostly in large cities such as New York, Washington, San Francisco, etc.

Chart. Unlike most other companies reviewed, Columbia Property has a slightly negative long-term share-price trend. At the same time, the company has the largest dividends in the review, which it pays quarterly.

Pros. Huge growth in quarterly profits, significant annual profit growth, highest dividend yield in the review.

Cons. Negative long-term share-price trend, decrease in turnover.

7. Finisar Corporation

Electric lights

— Symbol: FNSR

— Exchange: NASDAQ

— Market cap: $3.3B

— Annual turnover: $1.4B

— P/E: 13

— Dividend yield: −

— Share price change YoY: +59%

— Quarterly profit change YoY: +896%

— Annual profit change in 2015–2016: +609%

— Annual turnover change YoY: +59%

Description. An manufacturer of optical communication components and subsystems, mainly based on semiconductor lasers and photodetectors.

Chart. The company has a long track record, and not all of it is shown on the chart. In general, Finistar’s shares are quite volatile: over the recent 15 years, they have repeatedly collapsed and recovered more than 2 times during a year.

Pros. Excellent growth in both quarterly and annual profits (although not as excellent as one of Eagle Pharmaceuticals), significant turnover and shares price growth, moderate P/E ratio, long track record.

Cons. No dividend.

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