Strong buy companies are a great place to start when seeking companies to invest in. It can require a fair amount of effort and research to find stocks that are also trading at a bargain rate.
It’s difficult to predict if a company will become or remain profitable. You can only refer to information such as future guidance and expansion of past performance. It is best to choose companies that have been consistently profitable and offer the chance to continue that trend.
Below are a few companies trading at a discounted value despite their recent rally in share price.
Blue Owl Capital (OBDC)
Blue Owl Capital (NYSE:OBDC) is a business investment company that engages and provides loans, warrants, and direct lending to small and medium-sized companies.
Over the past year, its share price has risen by 28%, and it is still considered a highly discounted stock with plenty of room to grow.
On Feb. 21, it reported earnings for the fourth quarter full year 2023, in which it stated that total investment income increased by 3% and net income per share decreased slightly by 9% compared to the previous year. OBDC invested approximately $1.3 billion in 17 new portfolio companies and 14 existing clients within the fourth quarter.
Blue Owl Capital offers investors a rewarding dividend yield of 9.57% on an annual basis. Its latest quarterly dividend will be distributed on Apr. 15 for thirty-seven cents per share. Following the increased earnings for the fourth quarter, OBDC opted to provide a supplemental dividend payout of eight cents per share, payable back in March.
Blue Owl Capital is a strong buy, and investors particularly interested in income generation potential should not pass on OBDC, which continues to reward its shareholders.
Cardinal Health (CAH)
Cardinal Health (NYSE:CAH) it is a leading provider of healthcare services and products among medical facilities such as hospitals, laboratories, surgery centers, pharmacies, and physician offices.
On Feb. 1, CAH reported earnings for the second quarter of fiscal year 2024, and it stated that total revenue increased by 12% year-over-year. And it reported a net loss for the Q2 FY 2023 of $130 million. For Q2 FY 2024, it became a net income of $354 million. Its pharmaceutical segment reported a total profit that rose by 12%, and its medical segment saw an increase of more than fourfold from the previously mentioned time period.
Most notably, Cardinal Health raised its full-year 2024 guidance for earnings per share from $6.75-$7.00 to between $7.20-$7.35.
Cardinal Health offers investors a decent dividend yield of 1.83% on an annual basis that has seen consistent increases over nearly three decades.
CAH is a strong buy healthcare company that is a discounted stock even with its recent share price growth. It is a no-brainer for investors looking for a stock that should experience impressive earnings potential in the years to come.
Ares Capital (ARCC)
Ares Capital (NASDAQ:ARCC) is a company that focuses primarily on acquisitions, mezzanine debt, leveraged buyouts, and restructuring of small and medium-sized businesses.
This past year, ARCC’s share price increased by over 14%, partly because it beat analyst expectations regarding the latest earnings report.
On Feb.7, Ares Capital released its earnings for the fourth quarter of 2023, stating that total investment income increased by 10% and earnings per share more than doubled to seventy cents per share.
Ares Capital provides a strong dividend yield of 9.34% on an annual basis. Its most recent quarterly dividend, distributed on Mar. 29, was forty-eight cents per share.
ARCC is a strong buy business development company offering investors a solid dividend yield. With improved interest income, Ares is poised for continued growth potential and is still trading at a decent valuation.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.