It’s understandable to expect a massive tax cut to spur spending, but big U.S. companies were increasing sales at a faster pace even before President Trump got his way on the bill in late December.
Through Wednesday, 87% of S&P 500 Index SPX, +0.10% companies had reported results for fiscal quarters ending Nov. 26 or later, according to data provided by FactSet.
CFRA investment strategist Lindsey Bell estimated on Thursday that sales growth of 8.1% during the fourth quarter for the S&P 500 had accelerated from an average growth rate of 5% since “the emergence from the earnings recession of 2015-2016.” An estimated 15% increase in earnings per share made for three quarters of double-digit increases last year.
“The last time the index posted three quarters of double-digit growth in a year was 2011,” she wrote in a report.
It took time for the Internal Revenue Service and employers to adjust to the 2018 tax cuts, which means many workers didn’t see increases in their pay until some time this month. So the full effect of the cuts won’t be felt in the economy until the second quarter, and second-quarter earnings season begins the second week of July.
That will begin a full year of presumably excellent year-over-year sales and earnings comparisons for publicly traded U.S. companies, which in turn will set up increases in analysts’ earnings estimates. All of that can set higher floors under share prices.
We’re going to list the companies posting the strongest increases in sales this season, but with a twist. A company with a huge increase in sales may well have made an acquisition over the past year. If the acquisition was paid for in full or partly through the issuance of new shares, its shareholders’ ownership positions were diluted, so the raw sales increase doesn’t tell the entire story.
For example, Cboe Global Markets Inc. CBOE, -1.20% reported fourth-quarter revenue of $620.7 million, up 280% from a year earlier. But the company’s average diluted share count in the fourth quarter — used to calculate earnings per share — was 38.5% higher than a year earlier. The company issued shares to help pay for its acquisition of Bats Global Markets in February of last year.
So we’re going to look at sales per share, which bakes in any dilution from the issuance of stock as well as any reduction in share counts from the repurchase of shares.
Here are the 20 S&P 500 companies with the largest increases in sales per share for their most recently reported quarter through Feb. 21:
| Company | Ticker | Industry | Sales per share - most recently reported quarter | Sales per share - year-earlier quarter | Increase in sales per share |
| Cboe Global Markets Inc. | CBOE, -1.20% | Investment Banks/ Brokers | $5.51 | $2.01 | 174% |
| Ventas Inc. | VTR, +0.67% | Real Estate Investment Trusts | $2.49 | $1.16 | 115% |
| Ameriprise Financial Inc. | AMP, -0.86% | Investment Banks/ Brokers | $20.64 | $10.67 | 94% |
| CBS Corp. Class B | CBS, -1.91% | Broadcasting | $9.93 | $6.14 | 62% |
| DXC Technology Co. | DXC, +0.23% | Data Processing Services | $21.35 | $13.24 | 61% |
| Lam Research Corp. | LRCX, -0.46% | Electronic Production Equipment | $15.99 | $10.25 | 56% |
| Micron Technology Inc. | MU, -0.65% | Semiconductors | $5.55 | $3.64 | 53% |
| Helmerich & Payne Inc. | HP, +1.44% | Contract Drilling | $5.17 | $3.40 | 52% |
| Facebook Inc. Class A | FB, +0.61% | Internet Software/ Services | $4.39 | $3.00 | 46% |
| Halliburton Co. | HAL, +1.25% | Oilfield Services/ Equipment | $6.80 | $4.65 | 46% |
| Concho Resources Inc. | CXO, +0.01% | Oil and Gas Production | $5.24 | $3.61 | 45% |
| Pioneer Natural Resources Co. | PXD, +1.53% | Oil and Gas Production | $10.39 | $7.19 | 44% |
| Align Technology Inc. | ALGN, +2.99% | Medical Specialties | $5.15 | $3.61 | 43% |
| Sherwin-Williams Co. | SHW, +0.44% | Industrial Specialties | $41.65 | $29.43 | 41% |
| Cimarex Energy Co. | XEC, +0.33% | Oil and Gas Production | $5.89 | $4.17 | 41% |
| Nvidia Corp. | NVDA, +0.33% | Semiconductors | $4.64 | $3.29 | 41% |
| Vertex Pharmaceuticals Inc. | VRTX, -0.19% | Biotechnology | $2.54 | $1.85 | 37% |
| Amazon.com Inc. | AMZN, +0.16% | Internet Retail | $121.88 | $90.00 | 35% |
| Rockwell Collins Inc. | COL, +0.70% | Aerospace and Defense | $12.16 | $9.04 | 34% |
| Phillips 66 | PSX, +0.61% | Oil Refining/ Marketing | $51.54 | $38.46 | 34% |
| Source: FactSet | |||||
Cboe leads the list with a 174% increase in sales per share. This doesn’t quite match the raw sales increase but it’s an impressive figure. Amazon.com Inc. AMZN, +0.16% increased its sales per share by a remarkable 35%, and that figure wasn’t juiced by buybacks. It’s the largest company on the list by market value after becoming the third-biggest U.S. company by this measure last week.
Here’s a summary of analysts’ opinions about this group of sales-growth winners:
| Company | Ticker | Share 'buy' ratings | Share neutral ratings | Share 'sell' ratings | Closing Price - Feb. 21 | Consensus price target | Implied 12-month upside potential |
| Cboe Global Markets Inc. | CBOE, -1.20% | 36% | 64% | 0% | $111.30 | $118.08 | 6% |
| Ventas Inc. | VTR, +0.67% | 19% | 62% | 19% | $49.34 | $56.06 | 14% |
| Ameriprise Financial Inc. | AMP, -0.86% | 46% | 54% | 0% | $159.38 | $180.80 | 13% |
| CBS Corp. Class B | CBS, -1.91% | 68% | 32% | 0% | $55.38 | $70.19 | 27% |
| DXC Technology Co. | DXC, +0.23% | 70% | 30% | 0% | $100.88 | $110.16 | 9% |
| Lam Research Corp. | LRCX, -0.46% | 89% | 11% | 0% | $189.23 | $246.00 | 30% |
| Micron Technology Inc. | MU, -0.65% | 87% | 13% | 0% | $44.54 | $59.59 | 34% |
| Helmerich & Payne Inc. | HP, +1.44% | 13% | 56% | 31% | $64.46 | $63.00 | -2% |
| Facebook Inc. Class A | FB, +0.61% | 89% | 7% | 5% | $177.91 | $223.68 | 26% |
| Halliburton Co. | HAL, +1.25% | 89% | 11% | 0% | $46.55 | $63.21 | 36% |
| Concho Resources Inc. | CXO, +0.01% | 73% | 24% | 3% | $149.16 | $181.19 | 21% |
| Pioneer Natural Resources Co. | PXD, +1.53% | 87% | 13% | 0% | $174.73 | $219.62 | 26% |
| Align Technology Inc. | ALGN, +2.99% | 85% | 15% | 0% | $252.14 | $292.27 | 16% |
| Sherwin-Williams Co. | SHW, +0.44% | 69% | 31% | 0% | $397.13 | $455.26 | 15% |
| Cimarex Energy Co. | XEC, +0.33% | 71% | 29% | 0% | $95.13 | $144.31 | 52% |
| Nvidia Corp. | NVD, +1.21% | 46% | 45% | 9% | $241.51 | $247.50 | 2% |
| Vertex Pharmaceuticals Inc. | VRTX, -0.19% | 86% | 14% | 0% | $157.89 | $191.58 | 21% |
| Amazon.com Inc. | AMZN, +0.16% | 91% | 9% | 0% | $1,482.92 | $1,663.50 | 12% |
| Rockwell Collins Inc. | COL, +0.70% | 0% | 94% | 6% | $136.58 | $136.00 | 0% |
| Phillips 66 | PSX, +0.61% | 32% | 59% | 9% | $89.58 | $108.63 | 21% |
| Source: FactSet | |||||||
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