The recent stock market crash is due to the spread of the corona virus, which led to national lockdowns.
Despite sharp falls in the gross domestic product, the stock markets have almost completely compensated for their interim losses. Some stocks were even able to benefit from the corona pandemic – the so-called “stay-at-home” shares.
These are stocks whose business model benefits from the fact that people work from home and spend most of their time there. Numerous technology stocks can be listed here.
It is therefore not surprising why the technology index Nasdaq 100 reached new all-time highs despite the corona crisis.
Every crisis also harbors opportunities
Crises can therefore also offer opportunities for long-term investors. If a company does not benefit directly or indirectly from the crisis with its business model, the chance of a market sell-off could be to buy shares cheaply.
For a brief moment this year there was just such an opportunity in which the shares, which were already chronically expensive, could be bought a little cheaper – as I said, for a short moment.
Admittedly, the stock markets would recover from the corona pandemic so quickly, I didn’t expect that this time either. However, in memory of the 2009 financial crisis, I suspected that a sell-off would not last long. And so it ended up happening too.
The train has now left. But I did have a few thoughts about what stocks I would likely buy in the next crash. I will focus on dividend growth stocks that generate a high return on assets (ROA).
The key figure Return on Assets sets the profit in relation to the assets used, the assets. The higher the value, the higher the return on equity and debt.
The stocks of. Belong to companies that have a high return on assets MarketAxess (WKN: A0B897), Factset Research Systems (WKN: 901629) as well Clorox (WKN: 856678).
Shares with a high return on assets
MarketAxess is a global financial technology company that operates a trading platform for institutional credit markets. The company belonging to the S&P 500 also markets market data and post-trade services.
In 2019, net income was $ 205 million. In relation to the recognized assets of $ 955 million, this corresponds to an ROA of 21.5%.
Also convincing is the long-term growth, which has recently gained momentum again. Revenue for the second quarter of 2020 increased 47% year over year to $ 184.8 million. Operating income increased 71% to $ 104.1 million in the same period. Both numbers are at a record level, the Share price also drove to all-time highs.
2. Share with a high return on assets: Factset Research Systems
The second candidate for stocks with a high return on assets is Factset Research Systems, a company that provides financial data and software solutions for the financial industry. The company can thus be seen as a competitor of Thomson Reuters or Bloomberg.
In the 2019 fiscal year, a profit of $ 353 million was generated. In relation to the balance sheet total, which amounts to 1,56 billion US dollars, an ROA of 22.6% is calculated.
In the third quarter of 2020, which ended May 31, sales increased 2.6% to $ 374 million. Operating income increased 3.8% to $ 122 million, further demonstrating the high profitability of the global data provider.
The third and last share is Clorox, a manufacturer of hygiene and cleaning agents, which in the In the wake of the corona pandemic saw increased demand for its high performance cleaners.
In 2019, the Oakland, California-based company reported net income of $ 820 million. Based on total assets of $ 5.2 billion, the ROA is 15.7%.
In the third quarter of 2020, which also ended on May 31, 2020, sales increased 15% to $ 1.78 billion. The growth here was driven by the cleaning segment, which grew by 32%.
The post stock market crash? I would be happy to put these shares in the deposit! appeared first on The Motley Fool Germany.
Frank Seehawer owns shares in Thomson Reuters. The Motley Fool owns shares of and is recommended by FactSet Research Systems and MarketAxess Holdings.
Motley Fool Deutschland 2020