A company that doesn't produce profits isn't going to stay in business very long. And that's not good for the company or the company's investors. So when I'm researching companies, I'm always on the lookout for those that have a high estimated long term (five years) earnings growth rate. Generally I look for companies that are growing earnings at fifteen percent per year because those companies will double their earnings every five years.
Below is an even more select group of companies. Each of these seven companies are estimated to grow their earnings by twenty percent per year for the next five years. That's amazing. But before any investors get excited by this one fundamental measure, it should be noted that this is only one measure of success. It's also important to take into consideration the estimated one year return on invested capital. Or the dividend growth rate. Or the payout ratio. Or the price per earnings or the price to earnings to growth ratio.
The following list of companies are a good starting point for discovering possible candidates for accumulation. At first look I would be interested in doing more research on the following companies: Vail Resorts, Valero Energy Partners, National Instruments Inc., and Janus Capital Group.
Below is an even more select group of companies. Each of these seven companies are estimated to grow their earnings by twenty percent per year for the next five years. That's amazing. But before any investors get excited by this one fundamental measure, it should be noted that this is only one measure of success. It's also important to take into consideration the estimated one year return on invested capital. Or the dividend growth rate. Or the payout ratio. Or the price per earnings or the price to earnings to growth ratio.
The following list of companies are a good starting point for discovering possible candidates for accumulation. At first look I would be interested in doing more research on the following companies: Vail Resorts, Valero Energy Partners, National Instruments Inc., and Janus Capital Group.
1. Targa Resources Partners LP owns, operates, acquires, and develops midstream energy assets in the United States. The company’s Gathering and Processing division is involved in gathering, compressing, dehydrating, treating, conditioning, processing, and marketing natural gas; and gathering crude oil. This division gathers and processes natural gas from the Permian Basin in West Texas and Southeast New Mexico; the Fort Worth Basin, including the Barnett Shale, in North Texas; and the Williston Basin in North Dakota, as well as from the onshore and offshore regions of the Louisiana Gulf Coast and the Gulf of Mexico. It supplies natural gas through its gathering systems that comprise approximately 11,400 miles of natural gas pipelines. This division sells its residue gas to end users, such as commercial and industrial customers; and natural gas and electric utilities serving individual consumers, as well as to marketers into intrastate or interstate pipelines. Its Logistics and Marketing division converts mixed natural gas liquids (NGLs) into NGL products; provides value added services, such as fractioning, storing, terminaling, transporting, exporting, distributing, and marketing NGLs and NGL products; and storing and terminaling of refined petroleum products and crude oil, as well as supplies and markets natural gas. It serves end-users of NGL products, such as petrochemical and refining companies, and propane markets for heating, cooking, or crop drying applications through pipelines, barges, ships, trucks, and rail cars. This division owns or operates 39 storage wells with a storage capacity of approximately 64 million barrels. As of December 31, 2014, its transportation assets consisted of 716 leased and managed railcars, 75 owned and leased transport tractors, and 22 company-owned pressurized NGL barges. The company was founded in 2006 and is based in Houston, Texas. Targa Resources Partners LP is a subsidiary of Targa Resources Corp.
(Summary) (Company) (Daily Chart)
(Summary) (Company) (Daily Chart)
| May 2015 Price $46.12 1yr Target $51.10 Analysts 20 1yr Cap Gain 10.79% Dividend $3.28 Yield 7.11% 1yr Est Tot Return 17.90% 1yr DivGR 9.21% 3yr DivGR 9.95% 5yr DivGR 8.27% P/E 21.06 PEG 0.46 | Market Cap $8.51 Bil Beta 0.71 EPS (ttm) $2.19 Payout Ratio 149.77% EPS next yr $1.36 Forward P/E 33.99 5yr EPS 45.50% Debt/Equity 1.22 ROA 6.50% ROE 18.20% ROI 11.80% Sales $8.00 Bil Income $259.50 Mil Profit Margin 3.23% |
2. Vail Resorts, Inc. operates mountain resorts and urban ski areas in the United States. The company operates in three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates eight mountain resort properties, including the Vail, Breckenridge, Keystone, and Beaver Creek mountain resorts in Colorado; the Heavenly, Northstar, and Kirkwood mountain resorts in the Lake Tahoe area, California and Nevada; and the Canyons mountain resort in Park City, Utah, as well as two urban ski areas, such as Afton Alps and Mount Brighton Ski areas. Its resorts offer various winter and summer recreational activities, including skiing, snowboarding, snowshoeing, snowtubing, sightseeing, mountain biking, guided hiking, children's activities, and other recreational activities; and ski and snowboard lessons, equipment rental and retail merchandise services, dining venues, private club services, and other winter and summer recreational activities. This segment also leases its owned and leased commercial space; and provides real estate brokerage services. The Lodging segment owns and/or manages various luxury hotels under the RockResorts brand, and other lodging properties; various condominiums located in and around the company’s mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 4,900 owned and managed hotel and condominium rooms. The Real Estate segment owns, develops, markets, and sells real estate properties in and around the company’s resort communities. Vail Resorts, Inc. was founded in 1997 and is based in Broomfield, Colorado.
(Summary) (Company) (Daily Chart)
(Summary) (Company) (Daily Chart)
| May 2015 Price $103.37 1yr Target $113.43 Analysts 7 1yr Cap Gain 9.73% Dividend $2.40 Yield 2.32% 1yr Est Tot Return 12.05% 1yr DivGR 92.77% 3yr DivGR 51.98% 5yr DivGR N/A P/E 39.91 PEG 0.93 | Market Cap $3.76 Bil Beta 1.18 EPS (ttm) $2.59 Payout Ratio 92.66% EPS next yr $3.34 Forward P/E 30.95 5yr EPS 43.10% Debt/Equity 0.75 ROA 4.00% ROE 11.30% ROI 7.00% Sales $1.34 Bil Income $94.10 Mil Profit Margin 7.01% |
3. Valero Energy Partners LP owns, operates, develops, and acquires crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets in the United States. Its assets include crude oil and refined petroleum products pipeline and terminal systems, including Port Arthur logistics system, McKee products system, Memphis logistics system, Three Rivers Crude System, and Wynnewood Products System located in the Gulf Coast and Mid-Continent regions of the United States. Valero Energy Partners GP LLC serves as the general partner of the company. Valero Energy Partners LP was founded in 2013 and is headquartered in San Antonio, Texas.
(Summary) (Company) (Daily Chart)
(Summary) (Company) (Daily Chart)
| May 2015 Price $49.86 1yr Target $60.06 Analysts 8 1yr Cap Gain 20.45% Dividend $1.11 Yield 2.22% 1yr Est Tot Return 22.67% 1yr DivGR N/A 3yr DivGR N/A 5yr DivGR N/A P/E 41.90 PEG 1.44 | Market Cap $2.93 Bil Beta N/A EPS (ttm) $1.19 Payout Ratio 93.27% EPS next yr $2.14 Forward P/E 23.26 5yr EPS 29.10% Debt/Equity 0.01 ROA 12.60% ROE 18.00% ROI 15.60% Sales $141.60 Mil Income $68.90 Mil Profit Margin 48.22% |
4. Emerge Energy Services LP acquires, owns, operates, and develops a portfolio of energy service assets in the United States. The company operates in two segments, Sand and Fuel. The Sand segment is involved in the production and sale of various grades of industrial sand primarily used in the extraction of oil and natural gas, as well as in the production of building products and foundry materials. The Fuel segment operates two terminals and two transmix processing facilities located in the Dallas-Fort Worth, Texas area and Birmingham, Alabama. This segment also engages in the sale of wholesale petroleum products; provision of third-party terminaling services; blending of renewable fuels; and provision of reclamation services, such as tank cleaning services, as well as other complementary products and services. Emerge Energy Services GP, LLC operates as a general partner of the company. Emerge Energy Services LP was founded in 2012 and is based in Southlake, Texas.
(Summary) (Company) (Daily Chart)
(Summary) (Company) (Daily Chart)
| May 2015 Price $36.59 1yr Target $46.14 Analysts 7 1yr Cap Gain 26.10% Dividend $4.00 Yield 10.93% 1yr Est Tot Return 37.03% 1yr DivGR N/A 3yr DivGR N/A 5yr DivGR N/A P/E 9.92 PEG 0.36 | Market Cap $867.91 Mil Beta N/A EPS (ttm) $3.69 Payout Ratio 108.40% EPS next yr $2.99 Forward P/E 12.23 5yr EPS 27.30% Debt/Equity 1.51 ROA 22.50% ROE 55.20% ROI 25.00% Sales $1.11 Bil Income $89.10 Mil Profit Margin 8.01% |
5. National Instruments Corporation designs, manufactures, and sells systems to engineers and scientists worldwide. It provides LabVIEW, a system design software for measurement, automation, and control; LabVIEW Real-Time and LabVIEW FPGA, which are software add-ons to LabVIEW; LabVIEW Communications System Design Suite; LabWindows/CVI for creating test and control applications; and Measurement Studio consisting of measurement and automation add-on libraries, and additional tools for programmers. The company also offers a suite of software products, such as NI TestStand to test and measure applications in a manufacturing environment; NI VeriStand software to configure real-time testing applications; NI DIAdem, which provides users configuration-based technical data management, analysis, and report generation tools to mine and analyze data; NI InsightCM Enterprise for monitoring critical and ancillary rotating equipment; and NI Multisim circuit design software. In addition, it provides hardware products and related driver software, such as data acquisition, PXI chassis and controllers, modular instruments, image acquisition, motion control, distributed I/O, industrial communications interfaces, embedded control hardware/software, general purpose interface bus interfaces, and VME extension for instrumentation controllers. Further, the company offers NI education platform comprising software, hardware, and courseware for students; software and hardware products for teaching; hardware and software maintenance services; and training and certification services. It serves various industries and applications, including advanced research, automotive, automated test equipment, consumer electronics, commercial aerospace, computers and electronics, continuous process manufacturing, education, government/defense, medical research/pharmaceutical, power/energy, semiconductors, telecommunications, and others. The company was founded in 1976 and is headquartered in Austin, Texas.
(Summary) (Company) (Daily Chart)
(Summary) (Company) (Daily Chart)
| May 2015 Price $29.68 1yr Target $34.00 Analysts 2 1yr Cap Gain 14.55% Dividend $0.76 Yield 2.56% 1yr Est Tot Return 17.11% 1yr DivGR 7.14% 3yr DivGR 14.31% 5yr DivGR 13.39% P/E 30.92 PEG 1.24 | Market Cap $3.80 Bil Beta 1.16 EPS (ttm) $0.96 Payout Ratio 79.16% EPS next yr $1.10 Forward P/E 27.11 5yr EPS 25.00% Debt/Equity 0.00 ROA 8.60% ROE 11.20% ROI 11.40% Sales $1.25 Bil Income $122.60 Mil Profit Margin 9.76% |
6. Targa Resources Corp., thorough its general and limited partner interests in Targa Resources Partners LP, provides midstream natural gas and natural gas liquid (NGL) services in the United States. The company operates in two divisions, Gathering and Processing, and Logistics and Marketing. It is involved in gathering, compressing, treating, processing, and selling natural gas; storing, fractionating, treating, transporting, terminaling, and selling NGLs and NGL products; gathering, storing, and terminaling crude oil and refined petroleum products. The company also purchases and resells component NGL products; sells propane and provides related logistics services to multi-state retailers, independent retailers, and other end-users; offers NGL balancing services; and provides transportation services to refineries and petrochemical companies in the Gulf Coast area. It operates approximately 11,400 miles of natural gas pipelines, including 12 owned and operated processing plants; and 39 storage wells with a net storage capacity of approximately 64 million barrels. As of December 31, 2014, the company leased and managed approximately 716 railcars; 75 owned and leased transport tractors; and 22 company-owned pressurized NGL barges. Targa Resources Corp. was founded in 2005 and is headquartered in Houston, Texas.
(Summary) (Company) (Daily Chart)
(Summary) (Company) (Daily Chart)
| May 2015 Price $100.25 1yr Target $115.06 Analysts 17 1yr Cap Gain 14.77% Dividend $3.32 Yield 3.31% 1yr Est Tot Return 18.08% 1yr DivGR 30.24% 3yr DivGR 41.62% 5yr DivGR N/A P/E 41.26 PEG 1.66 | Market Cap $5.62 Bil Beta 1.30 EPS (ttm) $2.43 Payout Ratio 136.62% EPS next yr $3.57 Forward P/E 28.12 5yr EPS 24.80% Debt/Equity 16.99 ROA 1.90% ROE 78.00% ROI 18.30% Sales $8.62 Bil Income $102.30 Mil Profit Margin 1.18% |
7. Janus Capital Group, Inc. is a publicly owned asset management holding company with approximately $167.7 billion in assets under management. It also provides retirement planning, investment planning, tax planning, investment for college, and tax planning services to its clients. The firm primarily provides its services to investment companies, retail investors, institutions, and individuals. Through its subsidiaries, it manages equity, fixed income, money markets, and balanced mutual funds for its clients and invests in the public equity and fixed income markets across the globe. The firm was formerly known as Stilwell Financial Incorporated. Janus Capital Group was founded in 1969 and is based in Denver Colorado with additional offices in the United States, Hong Kong; London; Milan; and Tokyo, Japan.
(Summary) (Company) (Daily Chart)
(Summary) (Company) (Daily Chart)
| May 2015 Price $17.72 1yr Target $20.07 Analysts 7 1yr Cap Gain 13.26% Dividend $0.36 Yield 2.03% 1yr Est Tot Return 15.29% 1yr DivGR 14.81% 3yr DivGR 27.06% 5yr DivGR 50.61% P/E 20.14 PEG 1.00 | Market Cap $3.32 Bil Beta 1/95 EPS (ttm) $0.88 Payout Ratio 40.90% EPS next yr $1.26 Forward P/E 14.03 5yr EPS 20.20% Debt/Equity 0.29 ROA 6.00% ROE 10.60% ROI 9.40% Sales $985.70 Mil Income $162.80 Mil Profit Margin 16.44% |
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