Despite coronavirus chaos, it seems to be a wise idea to add Gladstone Investment Corporation GAIN to your portfolio at the moment. The company’s strong fundamentals and prospects keep us encouraged. Also, its focus on carrying out new investments will likely continue enhancing profitability.
The Zacks Consensus Estimate for earnings for the current year has moved 4.6% upward over the past 60 days, indicating the company’s sound earnings growth potential. Currently, the stock carries a Zacks Rank #2 (Buy).
Also, shares of Gladstone have lost 40.6% over the past six months compared with the industry’s 49.2% decline.
Factors Favoring Gladstone
Revenue Growth: Revenue growth remains a key strength for Gladstone. The top line witnessed a five-year (2015-2019) CAGR of 9.4%, driven by higher interest income and dividend. The company’s efforts to increase investments will likely support top-line growth.
Earnings Strength: Over the past three to five years, Gladstone’s earnings have increased 3.7% against the industry’s decline of nearly 1%. The uptrend is anticipated to continue, as the company’s 2020 earnings are projected to be up 18.2% year over year.
Gladstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with the average positive surprise being 13.8%.
Favorable VGM Score: Gladstone has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Strong Leverage: Gladstone’s favorable debt/equity ratio compared with the industry average reflects relatively strong financial health of the company. Thus, we believe that it will perform better than its peers in an unstable business environment.
Other Stocks to Consider
Tradeweb Markets Inc. TW witnessed an upward earnings estimate revision of 3.4% for 2020 over the past 30 days. The company’s shares have rallied 27.6% over the past year. It holds a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hilltop Holdings Inc.’s HTH earnings estimates for 2020 have been revised 15.1% upward over the past 30 days. Its shares have lost 22.6% over the past year. The stock currently carries a Zacks Rank #2.
Over the past 30 days, SLM Corporation’s SLM earnings estimates for 2020 have been unchanged. Shares of this Zacks Rank #1 company have lost 35.7% over the past year.
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SLM Corporation (SLM): Free Stock Analysis Report
Hilltop Holdings Inc. (HTH): Free Stock Analysis Report
Tradeweb Markets Inc. (TW): Free Stock Analysis Report
Gladstone Investment Corporation (GAIN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.