General Mills, J&J Lead High-Flyers - TheStreet

General Mills, J&J Lead High-Flyers

Church & Dwight, General Mills and Johnson & Johnson hit 52-week highs on Tuesday.
Author:
Publish date:

BOSTON (TheStreet) -- Consumer-staples and blue-chip stocks are continuing a streak of outperformance. Previously boring, slow-growth companies will be winners in a decade marked by overseas ascendance. Here are three top-ranked equities that hit 52-week highs Tuesday.

3. Church & Dwight

(CHD) - Get Report

rose 1% to $63.45. Shares of the household products company increased 19% over the past year.

The numbers

: Third-quarter profit increased 43% to $70 million, or 98 cents a share, as revenue inched up 2% to $646 million. Church & Dwight's gross margin jumped from 42% to 49%, and its operating margin climbed from 15% to 18%. Its cash balance more-than-doubled to $419 million, translating to a quick ratio of 1.1. Its 0.5 debt-to-equity ratio indicates a balanced capital structure.

The stock

: We rate Church & Dwight "buy." The stock returned 19% over the past year, less than major U.S. indices. Despite underperformance, Church & Dwight remains a fundamentally attractive investment. It receives superlative scores from our quantitative model and is undervalued in comparison to household products peers. Shares are inexpensive when considering book value, sales and cash flow per share.

2. General Mills

(GIS) - Get Report

advanced 0.6% to $71.91. Shares of the food-products company increased 22% over 12 months.

The numbers

: Fiscal second-quarter net income soared 50% to $566 million and earnings per share surged 52% to $1.66, boosted by a lower share count. Revenue inched up 2% to $4.1 billion. The company's gross margin widened from 33% to 48%, and its operating margin stretched from 12% to 22%. A quick ratio of 0.6 and debt-to-equity ratio of 1.1 reflect a less-than-ideal financial position. Consistent growth justifies the leverage.

The stock

: We rate General Mills "buy." The stock ascended 22% over the past year, trailing major U.S. indices. Despite the weak performance, General Mills is a top-rated stock. It receives exceptional marks from our quantitative model and is cheap in comparison to food-products peers. The shares are undervalued on the basis of trailing earnings, projected earnings and cash flow per share.

1. Johnson & Johnson

(SYMBOL)

climbed 1.2% to $65.35. Shares of the diversified-health-care company gained 18% during the past year.

The numbers

: Third-quarter net income inched up 1% to $3.3 billion and earnings per share rose 3% to $1.20, helped by a smaller float. Revenue declined 5% to $15.1 billion. Johnson & Johnson's gross margin remained steady at 75%, but its operating margin improved from 26% to 28%. The company has an admirable financial position, with $14 billion of cash and $12 billion of debt.

The stock

: We rate Johnson & Johnson "buy." The stock returned 18% during the past year, lagging behind major U.S. indices. Despite the underperformance, J&J earns outstanding scores from our quantitative equity model. The stock is cheap in comparison to pharmaceutical peers based on all of our valuation measures, including trailing earnings, projected earnings, book value, sales and cash flow per share.

-- Reported by Jake Lynch in Boston.