Earnings growth, without the debt

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October 10, 2005

Earnings growth, without the debt

Amey Stone

San Diego Investment adviser Brent Wilsey has come up with a list of companies that have low debt, but above-average earnings growth. He clarifies that this is "real" growth, meaning that it doesn't come from asset sales, accounting changes or other means.

Here's the five stocks he recommended on this basis in an email sent to me on 10/3:

1) HNI Corporation (NYSE:HNI)
Furniture & Fixtures Industry
"Earnings per share for the trailing twelve months versus that for one-year ago is a full 20%, which exceeds the industry average of 18%. Total debt to equity of 0.02 is far below the industry average of 1.20. Current Equity $708MM, Current debt $11MM, TTM earnings $126MM"

2) Bentley Pharmaceuticals, Inc. (NYSE:BNT)
Biotechnology & Drugs Industry
"Earnings per share for the trailing twelve months versus that for one-year ago is a whopping 50%, which exceeds the industry average of 31%. Minuscule total debt to equity of 0.03 is far below the industry average of 0.39. Current Equity $87MM, Current debt $3MM, TTM earnings $8.3MM"

3) Caremark RX, Inc. (NYSE:CMX)
Retail Drugs Industry
"Earnings per share for the trailing twelve months versus that for one-year ago is an impressive 44%, which exceeds the industry average of 21%. Total debt to equity of 0.06 is well below the industry average of 0.29. Current Equity $7.7 Billion, Current debt $.05 Billion, TTM earnings $787MM"

4) Global Payments, Inc. (NYSE:GPN)
Business Services Industry
"Earnings per share for the trailing twelve months versus that for one-year ago is a full 45%, which more than doubles the industry average of 22%. Total debt to equity is a mere 0.11 versus the industry average of 0.86. Current Equity $578MM, Current debt $64MM, TTM earnings $93MM"

5)Chicago Bridge & Iron (NYSE:CBI)
Construction Services Industry
"Earnings per share for the trailing twelve months versus that for one-year ago is a full 45%, which exceeds the industry average of 37%. Total debt to equity of 0.16 is well below the industry average of 0.96. Current Equity $503MM, Current debt $83MM, TTM earnings $83MM"

04:32 PM

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