For Immediate Release

Chicago, IL – May 15, 2025 – The stocks in this week’s article are Sterling Infrastructure, Inc. STRL, AXIS Capital Holdings Ltd. AXS, Molina Healthcare, Inc. MOH and Halozyme Therapeutics, Inc. HALO.

4 Stocks with Impressive Interest Coverage Ratios to Buy Now

We often judge a company based on its sales and earnings. However, these metrics may not be sufficient on their own. A stock might get a boost if these figures rise year over year or surpass estimates in a particular quarter, offering a lucrative opportunity for short-term investors to cash in. Relying solely on sales and earnings numbers may not yield the desired long-term returns. For those seeking sustainable investment growth, a deeper dive into the company’s financial health and stability is essential.

A critical analysis of a company’s financial background is a prerequisite for an informed investment decision. Coverage ratios, which assess whether a company is robust enough to meet its financial obligations, play a crucial role in this analysis. A higher ratio generally indicates a stronger financial position. This article focuses on the Interest Coverage Ratio, a key indicator used to evaluate a company's ability to pay interest on its debt, ensuring that the company is not over-leveraged and can comfortably meet its interest obligations from its operating earnings.

Interest Coverage Ratio = Earnings before Interest & Taxes (EBIT) divided by Interest Expense.

Sterling Infrastructure, Inc., AXIS Capital Holdings Ltd., Molina Healthcare, Inc. and Halozyme Therapeutics, Inc. boast an impressive interest coverage ratio.

Why Interest Coverage Ratio?

The interest coverage ratio is used to determine how effectively a company can pay the interest charges on its debt.

Debt, which is crucial for most companies to finance operations, comes at a cost called interest. Interest expense has a direct bearing on a company's profitability, and its creditworthiness depends on how effectively it meets interest obligations. Therefore, the interest coverage ratio is one of the important criteria to factor in before making any investment decision.

The interest coverage ratio suggests the number of times the interest could be paid from earnings and gauges the margin of safety a firm carries for paying interest.

An interest coverage ratio lower than 1.0 implies that the company is unable to fulfill its interest obligations and could default on repaying debt. A company that is capable of generating earnings well above its interest expense can withstand financial hardships. One should also track the company’s past performance to determine whether the interest coverage ratio has improved or worsened over time.

Story Continues

Here are four of the 14 stocks that qualified the screening.

Sterling Infrastructure, which is engaged in e-infrastructure, transportation and building solutions, carries a Zacks Rank #2 and has a VGM Score of A. Sterling Infrastructure delivered a trailing four-quarter earnings surprise of 11.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sterling Infrastructure’s current financial year earnings per share (EPS) suggests growth of 38.5% from the year-ago period. STRL has risen 38.3% in the past year.

AXIS Capital Holdings, a global specialty underwriter and provider of insurance and reinsurance solutions, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 13.9%, on average. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The Zacks Consensus Estimate for AXIS Capital’s current financial year sales and EPS implies growth of 9.2% and 3.4%, respectively, from the year-ago period. AXIS Capital has a VGM Score of B. Shares of AXS have rallied 43.1% in the past year.

Molina Healthcare, which provides managed healthcare services under Medicaid and Medicare programs and through state insurance marketplaces, carries a Zacks Rank #2 and has a VGM Score of A.

The Zacks Consensus Estimate for Molina Healthcare’s current financial year sales and EPS calls for growth of 8.4% and 7.8%, respectively, from the year-ago period. The stock has declined 10.3% in the past year.

Halozyme Therapeutics, a biopharmaceutical company, carries a Zacks Rank #2 and has a VGM Score of A. HALO has a trailing four-quarter earnings surprise of 17.6%, on average.

The Zacks Consensus Estimate for Halozyme Therapeutics’ current financial year sales and EPS suggests growth of 21% and 23.6%, respectively, from the year-ago period. The stock has risen 9.6% in the past year.

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Molina Healthcare, Inc (MOH):Free Stock Analysis Report

Axis Capital Holdings Limited (AXS):Free Stock Analysis Report

Halozyme Therapeutics, Inc. (HALO):Free Stock Analysis Report

Sterling Infrastructure, Inc. (STRL):Free Stock Analysis Report

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