Select Comfort (Nasdaq: SCSS) is a $2 billion company today. Investors that bought shares one year ago are sitting on a 63.78% total return. That’s above the S&P 500’s return of 13.69%.
Select Comfort stock is beating the market, but does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader.[ad#Google Adsense 336×280-IA]Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
Earnings-per-Share (EPS) Growth: Select Comfort reported a recent EPS growth rate of 111.11%.
That’s above the specialty retail industry average of 14.28%.
That’s a great sign. Select Comfort’s earnings growth is outpacing competitors.
Price-to-Earnings (P/E): The average price-to-earnings ratio of the specialty retail industry is 24.11. And Select Comfort’s ratio comes in at 23.69. It’s trading at a better value than many of its competitors.
Debt-to-Equity : The debt-to-equity ratio for Select Comfort Stock is 0. That’s below the specialty retail industry average of 58.28. The company is less leveraged.
Free Cash Flow per Share Growth : Select Comfort’s FCF has been higher than its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
Profit Margins : The profit margin of Select Comfort comes in at 6.21% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Select Comfort’s profit margin is above the specialty retail average of 5.34%. So that’s a positive indicator for investors.
Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Select Comfort is 39.15%, and that’s above its industry average ROE of 16.25%.
Select Comfort Stock passes six of our six key metrics today. That’s why our Investment U Stock Grader rates it as a strong buy.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing.
— Rob Otman[ad#IPM-article]
Source: Investment U