USING COMPARATIVE DATA FOR INVESTMENT ANALYSIS. Assume that you are a trust officer for the West Side Bank. You are attempting to select a pharmaceutical manufacturer’s stock for a client’s portfolio. You have secured the following data:

REQUIRED:
Select one of the securities for the portfolio and write a short report indicating why you selected that security.

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5-YEAR AVERAGES INDUSTRY FIRM AVERAGE FIRM FIRM FIRM A B C D Sales growth 8.3% 9.8% 7.9% 7.2% 10.1% Net income growth 13.0 12.0 10.7 4.2 16.1 Asset growth 5.0 6.1 4.6 4.4 6.2 Return on equity Return on assets Dividend payout Price-earnings ratio CURRENT YEAR 16.2% 17.5% 17.5% 19.4% 21.6% 8.5 7.8 12.7 8.4 11.4 43.0 40.0 23.0 31:0 31.0 12 11 6 10 9