blog

Latest from the Quantamize Blog

Five Blue-Chip Stocks We Think You Should Consider

Oct 18, 2018

 

Today at Quantamize, we highlight the five blue-chip stocks that are ‘Top Buys’ in our Global Top Stock Ideas. 

  • In the United States, we are highlighting three blue-chip stocks:
     
  • Home Depot Inc. (HD), the US home improvement retail giant, grew top-line revenue by 8.37% y/y in 2Q2018 while growing basic EPS by 35.4% y/y for the same period. On a valuation basis, HD is trading at an NTM P/E of 19.72x while its TEV/NTM Revenue multiple sits at 2.22x. HD is set to report 3Q2018 earnings on November 9th, 2018 and analysts expect EPS y/y growth of 23.4% to USD$2.27/share. HD receives ‘Top Buy’ scores in Technicals and Momentum factors while maintaining ‘Attractive’ scores in Quality Value and Growth factors
     
  • Union Pacific Corporation (UNP), the US railroad conglomerate, increased its top-line revenue 8.0% y/y while growing its basic EPS by 36.6% y/y in 2Q2018. Highlighting UNP is its dividend payout, which increased 19.67% y/y in 2Q2018 to USD$0.73/share. UNP trades at an inexpensive valuation on an NTM P/E basis, 14.52x, which translates to the 14.29% percentile of its historical trading levels. UNP is set to report 3Q2018 earnings on October 25th, 2018 with analyst expecting y/y EPS growth of 39.3% to USD$2.09/share.  UNP receives a ‘Top Buy’ score in our Quality Value factor and ‘Attractive’ scores in Momentum, Growth, and Technicals factors. 
     
  • TJX Companies (TJX), a discount apparel and home fashions retailer, grew its top-line revenue by 11.64% y/y to USD$9.33 billion in 2Q2018 while increasing basic EPS 36.8% y/y to USD$1.19 in the same time period. TJX also saw a large increase in its ROE to 56.4% in 2Q2018 from 48.6% in 2Q2017. TJX reports 3Q2018 on November 20th, 2018 with analysts projecting y/y EPS growth of 22.0% to USD$1.22/share. TJX maintains ‘Attractive’ scores in Quality Value, Momentum, Growth, and Technicals factors.
     
  • In Europe, we highlight one blue-chip stock,  Volvo AB (VOLV B). The Swedish auto manufacturer has seen its top-line revenue grow 17.9% y/y in 2Q2018 while its basic EPS grew a whopping 58.7% y/y over the same period. On a valuation basis, VOLV is currently trading at an attractive NTM P/E multiple of 10.74x and a TEV/NTM Total Revenue multiple of 1.03x. On Tuesday, VOLV announced that car engines sold in North America and Europe may be falling short of legal emission limits -- VOLV shares fell 5% as a result. VOLV receives a ‘Top Buy’ score in our Growth factor and ‘Attractive’ scores in Quality Value, Momentum, and Technicals factors.
     
  • In China, we highlight one blue-chip stock. Sinopharm Group Company (1099 HK), a wholesale and retail provider of pharmaceutical and healthcare products. In 2Q2018, Sinopharm grew its top-line revenue 7.1% y/y while increasing its gross margin to 8.7% from 7.9% a year prior. Sinopharm also looks attractive on a valuation basis with an NTM P/E of 15.06x and a TEV/NTM Total Revenue of 0.41x. Sinopharm will report 3Q2018 earnings on October 26th, 2018 with analysts expecting y/y top-line revenue growth of  7.6%. Sinopharm receives a ‘Top Buy’ score in our Technicals factor, ‘Attractive’ scores in Quality Value and Momentum factors, and a ‘Neutral’ score in our Growth factor.