Skip to content
Finance: management, investments, and tips. — Gentex — Stocks — First solar — Equities — Cal-maine foods — Balance sheet powerhouses — Nextracker — Mueller industries

Five Strong Financial Statements Analytical Tools I Suggest

Financial prowess beyond just earnings is crucial for companies, with their balance sheets serving as a robust indicator of their financial resilience.

,   and  Administrator
2 min read
Image depicting a Financial Evaluator in Action
Image depicting a Financial Evaluator in Action

Five Strong Financial Statements Analytical Tools I Suggest

"Winning isn't everything, but it sure is a major factor," in the world of finance, Vince Lombardi's sentiment is still relevant. While earnings are important, they're not the only game in town. Financial strength is crucial for a company to weather crises and seize opportunities with both hands.

Once a year, I celebrate these financially robust companies by publishing my Balance Sheet Powerhouse list. To make the cut, a company needs:

  • A market value of at least $5 billion.
  • Debt less than 10% of net worth.
  • U.S. base.
  • Current assets double current liabilities.
  • Earnings of at least 20 cents per share.

This year, a whopping 49 companies made the list, second only to the record-breaking 2006. But just because a company earns a spot on this list doesn't mean its stock is a surefire buy.

My Top 5 Picks

  1. Cal-Maine Foods Inc. (CALM): The largest U.S. egg producer has shown consistent dividend yield resilience.
  2. First Solar Inc. (FSLR): The largest American manufacturer of solar panels is likely to benefit from an anticipated tariff on Chinese panels.
  3. Gentex Corp. (GNTX): A relative bargain at 14 times earnings with consistent 7% annual revenue growth and 11% earnings boost in 2023.
  4. Mueller Industries Inc. (MLI): This Tennessee-based company keeps nailing it with seven straight return-on-equity levels above 15%.
  5. NEXTracker Inc. (NXT): Although Wall Street analysts have mixed feelings about it, I'm still a fan due to equipment that follows the sun's movements.

Medal Winners

Companies making the Balance Sheet Powerhouse list nine or more times deserve a pat on the back:

  • Dolby Laboratories Inc. (DLB)
  • Gentex (GNTX)
  • SEI Investments Co. (SEI)
  • Intuitive Surgical Inc. (ISRG)
  • Arista Networks Inc. (ANET)
  • Cognizant Technology Solutions Corp. (CTSH)

Newcomers

Welcome to the Anyone's Game:

  • AAON Inc. (AAON)
  • AppFolio Inc. (APPF)
  • Badger Meter Inc. (BMI)
  • Champion Homes Inc. (SKY)
  • Concept Therapeutics Inc. (CORT)

Record Breakers

My Balance Sheet Powerhouse picks have averaged a 14.1% one-year return since 2001, beating the S&P 500's 10.8% average. However, past performance may not predict future results.

So there you have it, folks. The Balance Sheet Powerhouse list may not be a magic ticket to riches, but it surely highlights financially strong companies that can offer long-term growth potential.

  1. Among the financially robust companies that made the Balance Sheet Powerhouse list this year, Gentex Corp. (GNTX) stands out as a relative bargain, with a consistent 7% annual revenue growth and an 11% earnings boost predicted for 2023.
  2. Mueller Industries Inc. (MLI) also made the list, and its impressive track record includes seven consecutive return-on-equity levels above 15%, making it a strong contender in the financial world.
  3. Nextracker Inc. (NXT), although not without mixed feelings from Wall Street analysts, is still a noteworthy pick due to its equipment that follows the sun's movements, providing a unique advantage in the renewable energy sector.
  4. In the world of stocks, First Solar Inc. (FSLR) is worth considering, especially in light of the anticipated tariff on Chinese solar panel imports, which could potentially benefit the largest American manufacturer of solar panels.

Read also:

    Related

    Latest