Yahoo Finance Zacks.com featured highlights Leidos, Sterling Infrastructure, Atmos Energy and Cabot
For Immediate Release
Chicago, IL – May 17, 2024 – Stocks in this week’s article are Leidos Holdings, Inc. LDOS, Sterling Infrastructure, Inc. STRL, Atmos Energy Corp. ATO and Cabot Corp. CBT.
Scoop Up These 4 Stocks with Amazing Interest Coverage Ratios
An ill-informed investor can lose cash if he wagers on a stock only on the basis of the numbers flashing on a real-time stock screen. A critical analysis of a company’s financial background is a must for a better investment decision, especially at a time when the stock market is juggling myriad issues.
Often, investors evaluate a company’s performance by simply looking at its sales and earnings, which sometimes do not reveal the real picture. To be more precise, they do not tell whether a company’s fundamentals are sound enough to meet its financial obligations. Here, the coverage ratio comes into play — the higher the metric, the more efficient an enterprise will be in meeting its financial obligations.
Why Interest Coverage Ratio?
The interest coverage ratio is used to determine how effectively a company can pay interest charges on its debt.
Debt, which is crucial to financing operations for the majority of companies, comes at a cost called interest. Interest expense has a direct bearing on the profitability of a company. The company’s creditworthiness depends on how effectively it meets its interest obligations. Therefore, interest coverage ratio is one of the important criteria to factor in before making any investment decision.
Interest Coverage Ratio = Earnings before Interest & Taxes (EBIT) divided by Interest Expense.
Interest coverage ratio suggests how many times the interest could be paid from earnings and gauges the margin of safety a firm has for paying interest.
An interest coverage ratio lower than one suggests that the company is unable to fulfill its interest obligations and could default on repaying debt. A company capable of generating earnings well above its interest expense can withstand financial hardships. One should also track the company’s past performance to determine whether the interest coverage ratio has improved or worsened over a period of time.
Leidos Holdings, Inc., Sterling Infrastructure, Inc., Atmos Energy Corp. and Cabot Corp. boasts an impressive interest coverage ratio.
Here are four of the 10 stocks that qualified the screening:
Leidos Holdings, which provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally, sports a Zacks Rank #1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Leidos Holdings’ current financial year sales and EPS suggests growth of 4.1% and 14.7%, respectively, from a year ago. Leidos Holdings has a trailing four-quarter earnings surprise of 23.4%, on average. The stock has rallied 87.5% in the past year.
Sterling Infrastructure, which is engaged in e-infrastructure, transportation and building solutions, carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Sterling Infrastructure’s current financial year sales and EPS suggests growth of 11.7% and 14.8%, respectively, from a year ago. Sterling Infrastructure has a trailing four-quarter earnings surprise of 22.3%, on average. The stock has surged 215.2% in the past year.
Atmos Energy, engaged in regulated natural gas distribution, and pipeline and storage businesses, carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Atmos Energy’s current financial year sales and EPS suggests growth of 9.5% and 9%, respectively, from the year-ago period. Atmos Energy has a trailing four-quarter earnings surprise of 3.3%, on average. The stock has risen 0.9% in the past year.
Cabot, a global specialty chemicals and performance materials company, carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Cabot’s current financial year sales and EPS suggests growth of 2.5% and 24.9%, respectively, from the year-ago period. Cabot has a trailing four-quarter earnings surprise of 3.8%, on average. The stock has advanced 47.2% in the past year.
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Atmos Energy Corporation (ATO) : Free Stock Analysis Report
Cabot Corporation (CBT) : Free Stock Analysis Report
Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report
Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
