## These 5 Stocks Excel at Converting Resources Into Returns

What separates winning companies from mediocre ones? Often it comes down to one thing: how efficiently they turn resources into profits. When a business can squeeze maximum output from its inputs—whether that's inventory, receivables, or assets—it tends to deliver superior stock performance. But spotting these efficiency powerhouses isn't always straightforward. That's where specific financial metrics come in.

Our screening process identified five standout names that demonstrate exceptional operational efficiency across multiple dimensions: **United Natural Foods** [UNFI](/market-activity/stocks/unfi), **Northrim BanCorp** [NRIM](/market-activity/stocks/nrim), **Lightspeed POS** [LSPD](/market-activity/stocks/lspd), **Ulta Beauty** [ULTA](/market-activity/stocks/ulta), and **Electromed** [ELMD](/market-activity/stocks/elmd).

## The Metrics That Matter Most

**Receivables Turnover & Debtors Turnover Ratio**

These interconnected metrics reveal how quickly a company collects its money. Calculate receivables turnover by dividing 12-month sales by average four-quarter receivables. The debtors turnover ratio serves a similar purpose—it shows management's effectiveness at converting customer debts into cash. A rising ratio signals strong credit management and quality customers.

**Asset Utilization (Asset Turnover)**

This is the efficiency workhorse. Divide trailing 12-month sales by average total assets from the last four quarters. Companies with high asset utilization ratios wring maximum revenue from every dollar of assets they own—a hallmark of operational excellence.

**Inventory Turnover**

Take 12-month cost of goods sold and divide by four-quarter average inventory. A healthy ratio means minimal excess stock relative to sales. Low ratios can signal trouble—declining revenues and warehouses full of unsold goods.

**Operating Margin**

The ratio of operating income (past 12 months) to sales reveals cost control capability. Companies with rising operating margins are managing expenses more carefully than competitors, which typically translates to stronger bottom-line performance.

## How We Narrowed the Field

We applied a rigorous filter: all five efficiency metrics had to exceed industry averages, combined with a Zacks Rank of #1 (Strong Buy). Screening over 7,900 stocks with these criteria produced just 16 qualified candidates. Here are the top five:

**United Natural Foods** — North America's leading distributor of natural and organic products. Average four-quarter earnings surprise: **52.10%**

**Northrim BanCorp** — Full-service bank operating in Alaska with consistent deposit growth. Average four-quarter earnings surprise: **19%**

**Lightspeed POS** — Cloud-based commerce platform helping retailers optimize operations. Average four-quarter earnings surprise: **17.9%**

**Ulta Beauty** — Dominant U.S. beauty chain with efficient inventory management. Average four-quarter earnings surprise: **15.7%**

**Electromed** — Specialized manufacturer of respiratory therapy devices with niche market leadership. Average four-quarter earnings surprise: **13.6%**

## The Performance Track Record

Stock-picking strategies based on efficiency metrics have delivered remarkable results since 2000. Top-ranked portfolios generated average annual returns of **+48.4%, +50.2%, and +56.7%**—dramatically outpacing the S&P 500's historical **+7.7%** pace.

The takeaway: efficiency isn't just an accounting measure—it's a powerful predictor of investment returns.