Skip to main content
Complete Olympic Games coverage at your fingertips
Your inside track on the Olympic Games
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Complete Olympic Games coverage at your fingertips
Your inside track onthe Olympics Games
$1.99
per week
for 24 weeks
// //

What are we looking for?

U.S.-listed stocks with a proven track record of strong earnings growth.

The second-quarter U.S. earnings season is now upon us. In the first quarter of this year, earnings were mostly positive for stocks in the S&P 500 index, with the biggest earnings surprises in the consumer discretionary, energy, communications and financial sectors.

With markets hovering near or at all-time highs, will we see a continuation of last quarter’s earnings strength?

Story continues below advertisement

The screen

In keeping with the earnings trend, we will be using Trading Central Strategy Builder to search for U.S. stocks that show consistent revenue and earnings growth ahead of their earnings releases.

We will start by screening for U.S. stocks with a market capitalization of at least US$20-billion. This will limit our search to the largest and most stable companies, with correspondingly high-quality revenue and earnings streams.

Next, we will look for companies with revenue growth and earnings-per-share growth of at least 20 per cent last quarter versus the same period a year earlier, as well as a five-year historical EPS growth rate of 20 per cent or higher.

Finally, we want stocks with a TC Quantamental Rating of at least five out of 10. This metric ranks stocks on a scale of one to 10, with 10 being the most bullish and one being the most bearish. The TC Quantamental Rating uses a combination of valuation, growth, quality, price momentum and income as key metrics when rating a company.

For informational purposes, we have also included the recent stock price, price-to-earnings ratio, expected earnings announcement date and dividend yield.

More about Trading Central

Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions.

Trading Central’s product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities.

Story continues below advertisement

Strategy Builder is available through leading retail brokers in Canada and worldwide.

What we found

Topping our list is KKR & Co. Inc., an investment firm that manages investments in private equity, credit and real assets. The company has the highest revenue growth at 88.6 per cent in the first quarter when compared to the same quarter in 2020, and impressive EPS growth of 170 per cent in the same period.

KKR’s five-year historical EPS growth is at 27.3 per cent. The stock posted a new intraday record high on Tuesday as market prices trended upward. The company is expected to report earnings on Aug. 4.

Second on our list is Best Buy Co. Inc., the consumer electronics retailer, which has the highest TC Quantamental Rating on our list at 7.72. The company’s five-year historical EPS growth rate is 21.7 per cent and it is expected to report earnings on Aug. 25.

Applied Materials Inc., one of the world’s largest suppliers of equipment, services and software to semi-conductor manufacturers, is the best-performing stock on our list, with a year-to-date gain of 57.2 per cent and a one-year gain of 116.9 per cent. The company’s five-year historical EPS growth rate is 28.5 per cent and it is expected to report earnings on Aug. 19.

Trading Central Strategy Builder provides a back-testing capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described had an average annual return of 24.3 per cent compared to 11.3 per cent for the S&P 500.

Story continues below advertisement

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central in respect of the investment in financial instruments. Investors should conduct further research before investing.

U.S. stocks with earnings growth 

RankCompanySymbolRecent Price (US$)Market Cap. (US$Bil) Revenue Growth (%Last Qtr.vs.Prior Yr)EPS Growth (%Last Quarter vs. Prior Yr)EPS Growth (%5-Yr Historical)TC Quantamental RatingP/EDiv. Yield (%)YTD Performance (%)1 Yr Performance(%)Expected Report Date
1KKR & Co IncKKR-N58.9151.388.60170.3027.36.97.0145.570.84-Aug
2Best Buy Co IncBBY-N109.9127.535.90280.3021.77.7212.92.610.126.4925-Aug
3Allstate CorpALL-N131.6939.426.2061.6027.95.655.82.519.846.764-Aug
4D.R. Horton IncDHI-N86.7731.243.3094.6025.97.3810.10.925.946.6922-Jul
5KLA CorpKLAC-Q309.1247.326.70632.0028.07.2826.01.219.453.8529-Jul
6Lam Research CorpLRCX-Q617.8888.153.7091.0032.57.0326.10.830.878.5528-Jul
7Applied Materials IncAMAT-Q135.65123.941.1074.4028.56.7928.30.757.2116.919-Aug
8Lowe's Companies IncLOW-N192.74136.224.1082.4023.26.7821.01.720.137.6118-Aug
9ASML Holding NVASML-Q716.51253.078.80244.1021.46.5356.20.546.982.5521-Jul
10Thermo Fisher Scientific IncTMO-N510.78200.059.00198.5026.57.1625.70.29.731.8328-Jul
11NVIDIA CorpNVDA-Q793.66494.083.80106.1044.95.9293.80.15291.2118-Aug
12Franco-Nevada CorpFNV-N149.9728.628.4053.3060.66.9747.90.819.72.2211-Aug
13West Pharmaceutical Services IncWST-N371.4427.436.50101.0028.66.4866.70.231.159.2229-Jul
14Intuit IncINTU-Q505.56138.139.0029.0040.15.764.20.533.177.1625-Aug
15STMicroelectronics NVSTM-N39.1235.635.2085.7058.55.6228.30.65.434.8529-Jul

Source: Trading Central 

Gary Christie is head of North American research at Trading Central in Ottawa.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies