The S&P 500 (^GSPC) is full of established businesses, but only some continue to outperform the market. A few standout companies are thriving thanks to strong fundamentals and sustained competitive advantages.
Not every big company is a great investment, and we’re here to help you find the best opportunities. Keeping that in mind, here are three S&P 500 stocks positioned to outperform.
Tractor Supply (TSCO)
Market Cap: $32.33 billion
Started as a mail-order tractor parts business, Tractor Supply (NASDAQ:TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer.
Why Is TSCO Interesting?
- Bold push to open new stores demonstrates an ambitious strategy to establish itself in underpenetrated territories
- Estimated revenue growth of 6.7% for the next 12 months implies its momentum over the last six years will continue
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Tractor Supply’s stock price of $61.29 implies a valuation ratio of 27.7x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Altria (MO)
Market Cap: $113.7 billion
Best known for its Marlboro brand of cigarettes, Altria (NYSE:MO) offers tobacco and nicotine products.
Why Are We Fans of MO?
- Products command premium prices and result in a best-in-class gross margin of 70.7%
- Healthy operating margin of 54.6% shows it’s a well-run company with efficient processes
- Strong free cash flow margin of 43.3% enables it to reinvest or return capital consistently
At $67.75 per share, Altria trades at 12.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Deckers (DECK)
Market Cap: $15.53 billion
Established in 1973, Deckers (NYSE:DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.
Why Are We Positive On DECK?
- Average constant currency growth of 18.2% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
- Free cash flow margin is forecasted to grow by 2.3 percentage points in the coming year, potentially giving the company more chips to play with
- Improving returns on capital reflect management’s ability to monetize investments
Deckers is trading at $104.75 per share, or 17.3x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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