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Zacks.com featured highlights Modine Manufacturing, Everest Group, Hilton Worldwide and Molina Healthcare
Read MoreHide Full Article
For Immediate Release
Chicago, IL – November 17, 2023 – Stocks in this week’s article are Modine Manufacturing Co. (MOD - Free Report) , Everest Group, Ltd. (EG - Free Report) , Hilton Worldwide Holdings Inc. (HLT - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) .
Pick These 4 Stocks with Excellent Interest Coverage Ratios
We often judge a company on the basis of its sales and earnings. These, however, may not be enough. Sometimes, a stock gets a boost if these numbers climb year over year or surpass estimates in a particular quarter, thus offering a great opportunity for an investor with a shorter horizon to cash in on. But if you seek long-term returns, investments backed only by sales and earnings numbers may not yield the desired results.
A critical analysis of a company’s financial background is a prerequisite for an informed investment decision. Here, coverage ratios that determine whether a company is sound enough to meet its financial obligations play a crucial role. The higher the ratio, the better. The focus of this article is on “Interest Coverage,” which is one such ratio.
Interest Coverage Ratio = Earnings before Interest & Taxes (EBIT) divided by Interest Expense.
Why Interest Coverage Ratio?
The interest coverage ratio is used to determine how effectively a company can pay the interest charges on its debt.
Debt, which is crucial for most companies to finance operations, comes at a cost called interest. Interest expense has a direct bearing on the profitability of a company and its creditworthiness depends on how effectively it meets interest obligations. Therefore, the interest coverage ratio is one of the important criteria to factor in before making any investment decision.
Interest coverage ratio suggests the number of times the interest could be paid from earnings and gauges the margin of safety a firm carries for paying interest.
An interest coverage ratio lower than 1.0 implies that the company is unable to fulfill its interest obligations and could default on repaying debt. A company that is capable of generating earnings well above its interest expense can withstand financial hardships. Definitely, 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.
Modine Manufacturing Co., Everest Group, Ltd., Hilton Worldwide Holdings Inc. and Molina Healthcare, Inc. boast an impressive interest coverage ratio.
Here are four of the 16 stocks that qualified the screening:
The Zacks Consensus Estimate for Modine Manufacturing’s current financial year sales and EPS suggests growth of 6.5% and 55.9%, respectively, from the year-ago period. MOD has a trailing four-quarter earnings surprise of 47%, on average. The stock has skyrocketed 137% in the past year.
Everest Group, a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions, carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Everest Group’s current financial year sales and EPS suggests growth of 19.4% and 105%, respectively, from the year-ago period. Everest Group has a trailing four-quarter earnings surprise of 24.5%, on average. The stock has advanced 22.9% in the past year.
Hilton Worldwide, a leading global hospitality company, carries a Zacks Rank #2 and has a VGM Score of B.
The Zacks Consensus Estimate for Hilton’s current financial year sales and EPS suggests growth of 16.1% and 24.3%, respectively, from the year-ago period. Hilton has a trailing four-quarter earnings surprise of 11.3%, on average. The stock has risen 20% in the past year.
Molina Healthcare, which provides managed healthcare services under Medicaid and Medicare programs and through state insurance marketplaces, carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Molina Healthcare’s current financial year sales and EPS suggests growth of 4.3% and 16.2%, respectively, from the year-ago period. Molina Healthcare has a trailing four-quarter earnings surprise of 7.5%, on average. The stock has risen 16.8% in the past year.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights Modine Manufacturing, Everest Group, Hilton Worldwide and Molina Healthcare
For Immediate Release
Chicago, IL – November 17, 2023 – Stocks in this week’s article are Modine Manufacturing Co. (MOD - Free Report) , Everest Group, Ltd. (EG - Free Report) , Hilton Worldwide Holdings Inc. (HLT - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) .
Pick These 4 Stocks with Excellent Interest Coverage Ratios
We often judge a company on the basis of its sales and earnings. These, however, may not be enough. Sometimes, a stock gets a boost if these numbers climb year over year or surpass estimates in a particular quarter, thus offering a great opportunity for an investor with a shorter horizon to cash in on. But if you seek long-term returns, investments backed only by sales and earnings numbers may not yield the desired results.
A critical analysis of a company’s financial background is a prerequisite for an informed investment decision. Here, coverage ratios that determine whether a company is sound enough to meet its financial obligations play a crucial role. The higher the ratio, the better. The focus of this article is on “Interest Coverage,” which is one such ratio.
Interest Coverage Ratio = Earnings before Interest & Taxes (EBIT) divided by Interest Expense.
Why Interest Coverage Ratio?
The interest coverage ratio is used to determine how effectively a company can pay the interest charges on its debt.
Debt, which is crucial for most companies to finance operations, comes at a cost called interest. Interest expense has a direct bearing on the profitability of a company and its creditworthiness depends on how effectively it meets interest obligations. Therefore, the interest coverage ratio is one of the important criteria to factor in before making any investment decision.
Interest coverage ratio suggests the number of times the interest could be paid from earnings and gauges the margin of safety a firm carries for paying interest.
An interest coverage ratio lower than 1.0 implies that the company is unable to fulfill its interest obligations and could default on repaying debt. A company that is capable of generating earnings well above its interest expense can withstand financial hardships. Definitely, 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.
Modine Manufacturing Co., Everest Group, Ltd., Hilton Worldwide Holdings Inc. and Molina Healthcare, Inc. boast an impressive interest coverage ratio.
Here are four of the 16 stocks that qualified the screening:
Modine Manufacturing, a diversified global leader in thermal management technology and solutions, sports a Zacks Rank #1 and has a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Modine Manufacturing’s current financial year sales and EPS suggests growth of 6.5% and 55.9%, respectively, from the year-ago period. MOD has a trailing four-quarter earnings surprise of 47%, on average. The stock has skyrocketed 137% in the past year.
Everest Group, a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions, carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Everest Group’s current financial year sales and EPS suggests growth of 19.4% and 105%, respectively, from the year-ago period. Everest Group has a trailing four-quarter earnings surprise of 24.5%, on average. The stock has advanced 22.9% in the past year.
Hilton Worldwide, a leading global hospitality company, carries a Zacks Rank #2 and has a VGM Score of B.
The Zacks Consensus Estimate for Hilton’s current financial year sales and EPS suggests growth of 16.1% and 24.3%, respectively, from the year-ago period. Hilton has a trailing four-quarter earnings surprise of 11.3%, on average. The stock has risen 20% in the past year.
Molina Healthcare, which provides managed healthcare services under Medicaid and Medicare programs and through state insurance marketplaces, carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Molina Healthcare’s current financial year sales and EPS suggests growth of 4.3% and 16.2%, respectively, from the year-ago period. Molina Healthcare has a trailing four-quarter earnings surprise of 7.5%, on average. The stock has risen 16.8% in the past year.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2185448/pick-these-4-stocks-with-excellent-interest-coverage-ratio
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
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Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.