Amazon & 3 More Stocks With Strong Interest Coverage Worth Buying

Core Insights - The article emphasizes that while sales and earnings are important metrics for evaluating a company, they may not be sufficient for long-term investment decisions. A deeper analysis of a company's financial health and stability is necessary for sustainable growth [1] Financial Analysis - A critical analysis of a company's financial background is essential for informed investment decisions, with coverage ratios being a key focus. The Interest Coverage Ratio is highlighted as a crucial indicator of a company's ability to meet its debt interest obligations [2][4] - The Interest Coverage Ratio is calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense, and companies like Amazon, Stride, Brinker International, and Cardinal Health have strong ratios [3] Importance of Interest Coverage Ratio - The Interest Coverage Ratio indicates how effectively a company can pay interest on its debt, with a ratio below 1.0 suggesting potential default risks. Companies generating earnings significantly above their interest expenses are better positioned to withstand financial difficulties [5][7] Investment Strategy - A winning 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, which can lead to better investment outcomes [8][11] - Stocks that meet criteria such as a minimum price of $5, strong historical and projected EPS growth, and substantial trading volume are more likely to perform well [9][11] Company Performance - Amazon has a Zacks Rank of 2, a VGM Score of B, and a trailing four-quarter earnings surprise of 22.5%, with projected sales and EPS growth of 12% and 29.7% respectively [10][12] - Stride also holds a Zacks Rank of 2 and a VGM Score of B, with projected sales and EPS growth of 4.6% and 3.1% respectively, despite a stock decline of 38.8% over the past year [12][13] - Brinker International has a Zacks Rank of 2 and a VGM Score of A, with projected sales and EPS growth of 6.5% and 14.9% respectively, and a stock increase of 15.7% in the past year [13][14] - Cardinal Health leads with a Zacks Rank of 2 and a VGM Score of A, showing a stock performance increase of 69.1% and projected sales and EPS growth of 16.3% and 20% respectively [10][14][15]