Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

StockSpreadsheet (71.58) Submitted: 7/27/07 3:02 AM : Start Price: $38.96 TEVA Score: 36.34

"A global pharmaceutical company producing drugs in all major treatment categories, focused on supplying the growing demand for generic drugs and on opportunities for proprietary branded products for specific niche categories"

Average annual sales growth of 30% over the past 7 years. Average annual EPS growth of 34% over past 5 years, though the most recent quarterly EPS was below this trend. Pretax profit margin averaging about 25.5% over past 3 years, which is pretty good. EPS/book value has fallen in each of the past 4 years, so this is bad. The debt-to-equity ratio rose last year, which is bad, and has continued to rise this year, which is also bad. The current P/E ratio is below the 5 year trailing average P/E, so that is good. The 5 year trailing average PEG ratio is a very respectable 0.53, so this is good. The current payout ratio is 14%, which is pretty low, so the dividend, currently yielding about 0.8%, should be secure and in fact there is room to raise it, if management so desires, as they have in each of the past 4 years. I think this stock could be worth $140.00 in 5 years, or about 3 times its current price of $43.29. Given its long-term steady growth and high potential appreciation, in addition to a decent dividend, I think this stock is a strong buy.

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