July 1, 2024
'2 Out of 3 Ain't Bad'
Dear Subscriber,
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| By Gavin Magor |
I absolutely love traditions.
In just three days, the skies across the United States will light up with fireworks just as they did 248 years ago in 1776.
But something that is currently shining just as bright as those fireworks are the “A”-rated Weiss stocks.
And as is tradition with the Weiss Ratings, we help all investors find stable and strong names.
Out of the entire universe of 12,562 stocks that Weiss Ratings has a grading for, only three are within our elusive “A” grade.
Today, I want to explore them with you. I’ll give you a hint: In the immortal words of Meatloaf, “Two out of three ain’t bad.”
Now wait, you may say. Only three publicly traded stocks across all the U.S. exchanges earn an “A”?
Believe it or not, that’s not out of the norm. We have a massive bias toward safety and stability. And we don’t grade on a curve.
To be granted an “A,” these stocks had to have been doing their homework. And they have to keep doing it to continue earning our highest mark.
After a few easy clicks on the Weiss Ratings stock screener page, you can see what those top three stocks are.
But first, here’s what constitutes an “A” rating:
I encourage all investors to look at all our “Buy” ratings, which encompass ratings of “B-” to “A.” At the moment, 784 stocks are “Buy”-rated.
But like I pointed out, only three have that current “A.” To earn that “A” rating, these stocks have to undergo very aggressive scrutiny.
Here are those current names:
At the moment, there is one large-cap stock, Comfort Systems (FIX), and two mid-cap stocks, MPLX (MPLX) and TerraVest Industries (TVK.TO), that sit high atop the ratings.
In the past, I have recommended both of the U.S.-traded ones to my premium subscribers.
Although TerraVest Industries is rated as an “A,” I typically don’t recommend names traded on the Toronto Stock Exchange or over the counter.
Perhaps you don’t mind trading outside of the major U.S. exchanges (e.g., the New York Stock Exchange, Nasdaq, NYSEArca). If so, I encourage you to look at it.
For today’s discussion, though, I want to focus on FIX and MPLX.
All Eyes on These
2 ‘A’-Rated Rangers
It doesn’t matter whether we’re talking about socks or stocks, the grade of a juicy steak or a particular brand of tea, I always want high quality.
With the Weiss Ratings “A” label on a particular stock, that’s a stamp of approval that I take seriously.
And by taking a quick look at both FIX and MPLX, you can see why they were handed that “A” grading.
Over the past year, MPLX shares are up 26%, and FIX shares are up 92%.
Another thing that stands out is how long both of these names have been rated as a “Buy.”
Comfort Systems has been rated a “Buy” since April 28, 2022 … and MPLX since Oct. 8, 2021.
MPLX hasn’t seen the same price appreciation as FIX. But it does pay out a very juicy dividend that’s currently yielding 7.84%.
The company’s EPS growth is nothing to write home about. But that’s what you should expect in a master limited partnership financial structure.
Plus, it’s not completely standing still. Recent predictions indicate a target upside of 8% EPS growth, which would be excellent coupled with that dividend.
The company appears to have a stable business model and quite a strong balance sheet.
Let's take a look at its five-year chart:
Like many stocks, especially energy names, it was dragged down during the pandemic. But shares have since rebounded a mighty 290% since its Covid-19 lows.
As for Comfort Systems, it’s a name I have been following for quite some time. Over the past year, shares are up 92%, and it is still trading at a relatively modest 31 times earnings.
It primarily operates in the HVAC industry, an industry that should continue to see massive tailwinds as construction sustains its momentum.
As with any “A”-rated name, its financials are very solid with consistent earnings and a balance sheet that is as solid as a brick.
As a habitual earnings beater — and with most of its revenue recurring … meaning it has contracts locked in — I find it to be a more stable name.
Let’s take a look at its five-year chart:
Over the past five years, shares are up a formidable 509%.
Whether you are looking to add a dynamite dividend payer like MPLX to your portfolio or a high-growth grower like FIX, I encourage you to explore all our stock ratings.
I hope you have a very happy 4th of July!
Cheers!
Gavin Magor
with
PJ Amirata
P.S. Soon, we’ll be sending you details on a project 10 years in the making. We want you to be ready. So, keep an eye on your inbox.
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