The major U.S. stock market indexes declined significantly on September 20 on investors’ pessimism surrounding China’s Evergrande Group, which might be on the brink of default. The stock market’s volatility can also be attributed to uncertainty regarding the timing of the Federal Reserve’s tapering activities and the increase in COVID-19 cases.

However, according to the Labor Department, the consumer price index (CPI) in August increased 5.3% from a year earlier and 0.3% from July, less than expected, signaling that inflation may be starting to cool. Furthermore, surprisingly, retail sales rose 0.7% in August despite fears related to the resurgence of the COVID-19 cases.

Against this backdrop, we think it could be wise to bet on quality mid-cap stocks Boyd Gaming Corporation (BYD), Signet Jewelers Limited (SIG), Dillard’s, Inc. (DDS), and Atkore Inc. (ATKR). These stocks are rated ‘Strong Buy’ in our POWR Ratings system. In addition, they possess a solid combination of growth and value attributes.

Boyd Gaming Corporation (BYD)

With a market capitalization of $6.78 billion, BYD is a multi-jurisdictional gaming company. The Las Vegas-based concern operates through three segments: Las Vegas Locals, Downtown Las Vegas, and Midwest & South. The company operates 28 gaming entertainment properties across Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania.

On June 9, BYD and Hawaiian Airlines announced a strategic partnership that will allow members to earn more benefits and rewards. Matt Ryan, senior vice president and chief marketing officer of BYD, said, “Through this new partnership, we can offer Boyd Gaming guests valuable rewards for their next excursion on Hawaiian Airlines–no matter which way they are going!”

BYD’s total revenue increased 325.8% year-over-year to $893.60 million for its fiscal second quarter, ended June 30, 2021. The company’s adjusted earnings came in at $175.16 million, versus a  $110.54 million  loss in the year-ago period. Also, its adjusted EPS was  $1.54 compared to a $0.98 loss per share  in the prior year period.

For its fiscal year 2021, analysts expect BYD’s EPS and revenue to increase 3,126.7% and 52.2%, respectively, year-over-year to $4.54 and $3.31 billion. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has gained 121.7% in price over the past year to close yesterday’s trading session at $60.46.

BYD’s POWR Ratings reflect this promising outlook. The company has an overall A rating, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

The stock has an A grade for Growth and Quality, and a B grade for Sentiment, Value, and Momentum. Within the Entertainment – Casinos/Gambling industry, BYD is ranked #2 of 32 stocks. Click here to see the additional POWR Rating for BYD (Stability).

Signet Jewelers Limited (SIG)

Based in Hamilton, Bermuda, SIG retails diamond jewelry, watches, and other products. It operates through three segments: North America; International; and Other. It has 2,833 stores and kiosks, including 2,381 locations in the United States and 100 locations in Canada. It has a  $4.21 billion market capitalization.

On August 3,Joan Hilson, the company’s chief financial & strategy officer, said, “First, we have renegotiated our $1.5 billion asset-based lending facility, which now matures in 2026, contains less restrictive covenants, and affords us greater financial flexibility. Second, we have entered into new, long-term receivable purchase agreements, which provide us with improved terms and fully removes consumer credit risk from our balance sheet.”

SIG’s sales increased 101.3% year-over-year to $1.79 billion for its  fiscal second quarter, ended June 30, 2021. The company’s non-GAAP operating income came in at $223 million, versus a $41.70 million loss in the year-ago period. Also, its non-GAAP EPS was  $3.57, compared to a $1.13 loss per share  in the prior year.

Analysts expect SIG’s EPS and revenue to increase 345% and 33.1%, respectively,  year-over-year to $9.39 and $6.96 billion in its fiscal year 2022. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past month, the stock gained 12.8% in price to close yesterday’s trading session at $79.45.

SIG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.

In addition, it has an A grade for Growth, Momentum, and Quality, and a B grade for Value. We have also graded SIG for Sentiment and Stability. Click here to access all of SIG’s ratings. SIG is ranked #5 of 63 stocks in the A-rated Fashion & Luxury industry.

Dillard’s, Inc. (DDS)

With a market capitalization of $4.11 billion, DDS operates retail department stores in the Southeastern, Southwestern, and Midwestern areas of the United States. Its stores offer merchandise, including fashion apparel, accessories, cosmetics, home furnishings, and other consumer goods. The Little Rock, Ark.-based company also engages in general contracting construction activities.

On August 19, DDS declared a $0.20 per share cash dividend on the company’s Class A and Class B common stock, representing a $0.05 increase from the prior $0.15 dividend. This represents its financial strength.

DDS’ sales increased 70.9% year-over-year to $1.57 billion for its fiscal second quarter ended June 30, 2021. The company’s net income came in at $185.70 million compared to an $8.60 million loss in the year-ago period. Also, its EPS was  $8.81 compared to a $0.37  loss per share in the prior year period.

DDS’ EPS and revenue are expected to increase 1,245% and 43.4%, respectively,  year-over-year to $31.83 and $6.36 billion. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has gained 502.9% in price over the past year to close yesterday’s trading session at $199.63.

DDS’ POWR Ratings reflect solid prospects. The company has an overall A rating, which translates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Growth, Value, and Quality.

Click here to see the additional POWR Ratings for DDS (Momentum, Stability, and Sentiment). DDS is ranked #8 in the Fashion & Luxury industry.

Atkore Inc. (ATKR)

ATKR in Harvey, Ill., manufactures and distributes electrical raceway products and mechanical products and solutions internationally. The company offers products under the Allied Tube & Conduit, AFC Cable Systems, Heritage Plastics, and Unistrut brands. It serves a group of end markets that include new construction, maintenance, repair, and remodeling. It has a $3.98 billion market capitalization. On August 3, 2021, Bill Waltz, ATKR’s President and CEO, said, “We expect these favorable market dynamics to continue, and combined with our strategic investments, we are also raising our perspective on fiscal 2022. Looking ahead, we will continue to invest in new products, marketing, and business development to help improve Atkore’s position for the future.”

ATKR’s net sales increased 121.8% year-over-year to $853.66 million for its fiscal third quarter, ended June 25, 2021. The company’s adjusted EBITDA grew 330.4% year-over-year to $274.26 million, while its net income increased 483.5% year-over-year to $187.16 million. Also, its adjusted EPS was $3.96, up 491% year-over-year.

ATKR’s EPS is expected to be  $10.09 in its fiscal year 2021, representing a 229.1% year-over-year increase. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Also, the company’s revenue is expected to increase 74.9% year-over-year to $835.14 million for the quarter ending September 30, 2021. Over the past year, the stock gained 270.2% in price to close yesterday’s trading session at $86.34.

It’s no surprise that ATKR has an overall A rating, which equates to a Strong Buy in our POWR Rating system. In addition, the stock has an A grade for Growth, Momentum, and Quality, and a B grade for Value and Sentiment.

Click here to see ATKR’s rating for Stability as well. In addition, ATKR is ranked #2 of 38 stocks in the Industrial – Metals industry.

Click here to check out our Industrial Sector Report for 2021

BYD shares were trading at $63.27 per share on Wednesday afternoon, up $2.81 (+4.65%). Year-to-date, BYD has gained 47.41%, versus a 18.70% rise in the benchmark S&P 500 index during the same period.

About the Author: Nimesh Jaiswal

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...

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