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4 Reasons to Add RCI Hospitality (RICK) to Your Portfolio

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Shares of RCI Hospitality Holdings Inc. (RICK - Free Report) have skyrocketed 132.6% in the past year, widely outpacing its industry’s growth of 32.5%.

Meanwhile, the company has been seeing upward revisions in its current-quarter and current-year estimates, over the past two months.

Given this Zacks Rank #2 (Buy) company’s solid progress on the fundamentals, we believe that this is the right time to add the stock to your portfolio as it is poised to carry the momentum ahead.

What Makes RCI Hospitality a Solid Pick?

Solid Estimated Sales & EPS Growth: RCI Hospitality’s current-year revenues are anticipated to grow 14.2% year over year, widely outpacing the industry’s projected average growth of just 3.8%.

Strong top-line growth is expected to translate to an even more robust bottom-line performance. Therefore, the company’s projected EPS growth is a whopping 28.6% compared with the industry average of 11.9%.

Arguably, nothing is more important than earnings growth as surging profit levels is often an indication of strong prospects (and stock price gains) ahead for the company in question.

Superior Return on Equity: RCI Hospitality delivered return on equity (ROE) of 10.8% in the trailing 12 months compared with the industry’s average of 8.8%. This supports its growth potential and indicates that the hospitality firm reinvests more efficiently compared with its peers.

Good VGM Score: RCI Hospitality has a VGM Score of A. Our VGM Score identifies stocks that have the most attractive value, growth and momentum characteristics. In fact, our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 make solid investment choices.

Low Beta Stock: A stock with beta less than 1 suggests that the price movement of the stock is not highly correlated with the market. Since they are less volatile than the market, they are safer bets. RCI Hospitality has an impressive beta of 0.3. Adding it to your portfolio brings down your portfolio’s overall beta, thereby reducing its risk.

Key Picks

Some other top-ranked stocks in the Zacks Consumer Discretionary sector include Malibu Boats, Inc. (MBUU - Free Report) , Polaris Industries Inc. (PII - Free Report) and Planet Fitness, Inc. (PLNT - Free Report) . While Malibu Boats flaunts a Zacks Rank #1, Polaris and Planet Fitness carry the same bullish rank as RCI Hospitality. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, Malibu Boats, Polaris and Planet Fitness pulled off an average positive earnings surprise of 6.01%, 7.07% and 15.72%, respectively.

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