15 US-Listed Companies With Rock-Solid Balance Sheets to Consider for Your Portfolio
Sudhan Pâ—Ź
One of the criteria to look out for when investing in stocks is whether the company has a robust balance sheet.
This is especially critical during periods of economic uncertainties, like now.
What I mean by a strong balance sheet is that the company should have more cash than debt.
If that’s not possible, it should at least have manageable debt so that it doesn’t run the risk of going bankrupt.
To know whether a company is loaded with cash, investors can look at the financial statement of each listed company to analyse its balance sheet.
BUT….
It would be an almost impossible task to comb through each of the thousands of stocks listed in the stock market to filter out the worthy ones.
Luckily, there are stock screeners to help us with this.
Screening for Strong US Companies
Recently, to look for investments ideas for my stock portfolio, I screened for US-listed companies that contain strong balance sheets.
Those companies are more likely to withstand the tough economic conditions than those that are laden with huge amounts of debt.
I used five broad criteria to filter the universe of US-listed stocks. Those criteria and the reasons I chose them are:
- Market capitalisation (more than US$2 billion) — to have companies that are more-established
- Gross profit margin (five-year average of more than 40%) — reveals companies with pricing power
- Net profit margin (five-year average of more than 20%) — another sign of a strong company
- Earnings per share (EPS) growth (five-year average of above 15%) — shows companies with business growth
- Debt-to-equity (between 0% and 10%) — ensures a robust balance sheet
The stock screener revealed over 30 stocks meeting those five factors.
From there, I further filtered down the stocks to those that I think might be worth looking deeper into.
Here are the top 15 stocks sorted according to market capitalisation:
| Company | Ticker | Last Close (US$) | Market Cap (US$ billion) | P/E Ratio | Gross Margin (%) | Net Profit Margin (%) | 5-Year EPS Growth (%) | Total Debt to Equity (%) |
|---|---|---|---|---|---|---|---|---|
| Alphabet | GOOGL (Class A) | 2,062.52 | 1,390 | 33.81 | 56.49 | 22.06 | 22.32 | 6.75 |
| FB | 294.53 | 838.7 | 29.2 | 82.88 | 33.9 | 50.83 | 0.41 | |
| Monster Beverage | MNST | 91.09 | 48.1 | 34.54 | 59.92 | 30.65 | 22.74 | 0.02 |
| Align | ALGN | 541.53 | 42.9 | 24.12 | 73.28 | 71.84 | 66.22 | - |
| Veeva Systems | VEEV | 261.24 | 39.8 | 104.64 | 71.26 | 25.94 | 44.63 | 0.02 |
| Trade Desk | TTD | 651.66 | 30.9 | 132.86 | 77.66 | 28.98 | 78.83 | - |
| Garmin | GRMN | 131.85 | 25.3 | 25.51 | 58.32 | 23.7 | 16.72 | - |
| Arista Networks | ANET | 301.89 | 23 | 37.79 | 64.06 | 27.38 | 36.74 | - |
| MarketAxesss | MKTX | 497.92 | 18.9 | 63.44 | 94.2 | 43.44 | 25.20 | - |
| Bio-Rad Labs | BIO (Class A) | 571.17 | 17.1 | 4.52 | 55.01 | 149.52 | 101.01 | 0.14 |
| PagSeguro Digital | PAGS | 46.3 | 15.2 | 67.02 | 49.67 | 20.67 | 117.88 | 0.80 |
| Masimo | MASI | 229.72 | 12.7 | 55.44 | 66.34 | 21.01 | 21.70 | - |
| Texas Pacific Land Trust | TPL | 1,589.43 | 12.3 | 70.03 | 96.45 | 58.19 | 30.04 | - |
| Universal Display | OLED | 236.77 | 11.2 | 84.56 | 78.91 | 31.10 | 55.42 | - |
| Qualys | QLYS | 104.78 | 4.1 | 46.66 | 77.76 | 25.23 | 40.11 | 0.02 |
Digging Further
What I would do with the list above is to pick those companies that are within my circle of competence and then research further into them to see if they have long-term growth prospects.
You can try that too.
To help in your stock-picking journey, you can check out The Ultimate Beginner’s Guide to Picking Your First Stock.
This article is certainly not a recommendation to buy or sell any of the companies mentioned, but to give you an idea of how to go about finding stocks to invest in.
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer may have a vested interest in some of the companies mentioned.
