Pick These 4 Stocks With Excellent Interest Coverage Ratio

Core Viewpoint - Relying solely on sales and earnings figures may not provide sufficient insights for long-term investment decisions; a deeper analysis of a company's financial health, particularly its Interest Coverage Ratio, is essential for sustainable growth [1][2]. Financial Analysis - A critical analysis of a company's financial background is necessary for informed investment decisions, with coverage ratios being a key component [2]. - The Interest Coverage Ratio is a vital indicator that assesses a company's ability to pay interest on its debt, ensuring it is not over-leveraged [4][5]. - The formula for the Interest Coverage Ratio is Earnings before Interest & Taxes (EBIT) divided by Interest Expense [3]. Importance of Interest Coverage Ratio - A higher Interest Coverage Ratio indicates a stronger financial position, while a ratio below 1.0 suggests potential default on interest obligations [6][7]. - Companies with a robust Interest Coverage Ratio can better withstand financial hardships, making it a crucial metric for investors [7]. Investment Strategy - An effective investment strategy includes selecting stocks with an Interest Coverage Ratio above the industry average, a favorable Zacks Rank, and a VGM Score of A or B [8][10]. - Additional criteria for stock selection include a minimum stock price of $5, strong historical EPS growth, projected EPS growth above the industry median, and substantial trading volume [9]. Company Performance Highlights - Stride, Inc. (LRN) has a Zacks Rank of 1, with projected sales growth of 12.4% and EPS growth of 42% for the current financial year, and has increased by 65.2% over the past year [11]. - Modine Manufacturing Company (MOD) holds a Zacks Rank of 2, with projected sales growth of 8.4% and EPS growth of 18.8%, and has surged by 222.2% in the past year [12]. - H&R Block, Inc. (HRB) also has a Zacks Rank of 2, with projected sales growth of 3% and EPS growth of 18.4%, and has rallied by 46.3% in the past year [13]. - Leidos Holdings, Inc. (LDOS) carries a VGM Score of B and a Zacks Rank of 2, with projected sales growth of 5.4% and EPS growth of 22.7%, and has surged by 83.8% in the past year [14].