Over the last 7 days, the United States market has remained flat, yet it is up 22% over the past year with earnings expected to grow by 15% per annum over the next few years. In this promising environment, identifying lesser-known stocks with strong fundamentals and growth potential can be a rewarding strategy for investors.
Top 10 Undiscovered Gems With Strong Fundamentals In The United States
Overview: Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company, offering a range of banking products and services in the United States, with a market cap of approximately $1.24 billion.
Operations: Republic Bancorp generates revenue primarily from Core Banking - Traditional Banking ($223.15 million), Republic Credit Solutions ($39.93 million), and Tax Refund Solutions ($22.68 million). The company also earns from Warehouse Lending ($9.91 million) and Republic Payment Solutions ($17.85 million).
Republic Bancorp, with total assets of US$6.6B and equity of US$955.4M, offers a solid financial foundation. Total deposits stand at US$5.1B while loans are at US$5.2B, supported by a net interest margin of 4.9%. The bank has an appropriate level of bad loans (0.4%) and a sufficient allowance for bad loans (393%). Recent earnings show net income rose to US$25.21M in Q2 2024 from US$21.05M last year, reflecting high-quality earnings growth by 10.8%.
Overview: Tennant Company, along with its subsidiaries, designs, manufactures, and markets floor cleaning equipment globally across the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions and has a market cap of approximately $1.81 billion.
Operations: Tennant generates revenue primarily from the design, manufacture, and sale of products used in the maintenance of nonresidential surfaces, amounting to $1.26 billion. The company has a market cap of approximately $1.81 billion.
Tennant, a smaller player in the machinery industry, has shown impressive earnings growth of 16% over the past year, outpacing the industry's 9.4%. The company's net debt to equity ratio stands at a satisfactory 20.3%, down from 105.6% five years ago. Tennant's interest payments are well covered by EBIT with a coverage ratio of 13x. Despite recent earnings showing net income at US$27.9 million for Q2 compared to US$31.3 million last year, Tennant remains profitable and raised its full-year sales guidance to US$1.28-1.31 billion.
Overview: Valhi, Inc. operates in the chemicals, component products, and real estate management and development sectors across Europe, North America, the Asia Pacific, and internationally with a market cap of approximately $796.22 million.
Operations: Valhi, Inc. generates revenue primarily from its chemicals segment ($1.78 billion), followed by component products ($157.40 million) and real estate management and development ($78.50 million).
Valhi, Inc. has shown impressive earnings growth of 215.4% over the past year, significantly outpacing the chemicals industry's -4.8%. The company’s net debt to equity ratio stands at a satisfactory 8.6%, and its interest payments are well covered by EBIT with a 4.7x coverage. Recently, Valhi announced a quarterly dividend of US$0.08 per share and reported second-quarter sales of US$559.7 million, up from US$507.1 million last year, with net income reaching US$19.9 million compared to a previous net loss of US$3.2 million.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NasdaqGS:RBCA.A NYSE:TNC and NYSE:VHI.
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