Scoop Up These 4 Top-Ranked Liquid Stocks to Augment Portfolio Returns

Identifying stocks that deliver strong returns can be challenging for investors. In such cases, evaluating a company's liquidity can be helpful, as it serves as a reliable indicator of financial health. Liquidity is a measure of a company’s capability to meet short-term debt obligations. Stocks with high liquidity levels have always been in demand owing to their potential to provide maximum returns.

Investors may want to consider adding four top-ranked stocks, such as Moelis & Company MC, Frontdoor, Inc. FTDR, Zumiez Inc. ZUMZ and Willdan Group, Inc. WLDN to their portfolio to boost returns.

However, it is important to exercise caution before investing in such stocks. While high liquidity can indicate that a company is efficiently managing its short-term obligations, it may also suggest underutilization of resources. In some cases, companies with excess liquidity may not be deploying their assets effectively, which could limit growth potential.

Hence, one may consider a company’s efficiency level in addition to its liquidity while identifying prospective winners. A balanced assessment of both liquidity and efficiency can help identify truly promising investment opportunities.

Measures to Identify Liquid Stocks

Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company’s potential to meet short- and long-term debt obligations. A current ratio — the working capital ratio — below 1 indicates that the company has more liabilities than assets. A high current ratio does not always suggest that the company is in good financial shape. It may also indicate that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.

Quick Ratio: Unlike the current ratio, the quick ratio — the “acid-test ratio” or “quick assets ratio” — indicates a company’s ability to pay short-term obligations. It considers inventory, excluding current assets, relative to current liabilities. A quick ratio of more than 1 is desirable, like the current ratio.

Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company’s ability to meet existing debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.

A ratio greater than 1 is always desirable, but may not always represent a company’s financial condition.

Screening Parameters

To pick the best of the lot, we have added asset utilization — a widely used measure of a company’s efficiency — as one of the screening criteria. Asset utilization is the ratio of total sales in the past 12 months to the last four-quarter average of total assets. Though this ratio varies across industries, companies with a ratio higher than that of their industry can be considered efficient.

We added our proprietary Growth Score to the screen to ensure these liquid and efficient stocks have solid growth potential.

Current Ratio, Quick Ratio, and Cash Ratio between 1 and 3: While liquidity ratios greater than 1 are desirable, significantly high ratios may indicate inefficiency.

Asset utilization is more significant than the industry average: A higher asset utilization than the industry average indicates a company’s efficiency.

Zacks Rank equal to #1: Only Strong Buy-rated stocks can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.

Growth Score less than or equal to B: Back-tested results show that stocks with a Growth Score of A or B handily beat other stocks when combined with a Zacks Rank #1 or 2 (Buy).

These criteria have narrowed the universe of more than 7,700 stocks to only 11.

Here are four of the 11 stocks that qualified the screen:

Moelis & Company is a global investment bank, providing strategic and financial advisory services to corporations, governments and financial sponsors across all major industries. The company’s advisory services include mergers & acquisitions, capital markets transactions, recapitalizations and restructurings, and other corporate finance matters like public/private debt and equity transactions.

Moelis & Company is benefiting from growth in capital markets as well as synergies from M&A.  These, along with higher average fees and diversified operations across sectors and industries, are expected to boost its top-line growth.

For the second quarter 2025, MC delivered total revenues (GAAP basis) of $364.4 million, which grew 38.1% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $281.8 million. Also, the company had a solid liquidity position in the quarter. However, an increase in expenses was a headwind.

The Zacks Consensus Estimate for MC’s 2025 earnings is pegged at $2.51 per share, unchanged in the past seven days. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 61.11%, on average.

Frontdoor is the parent company of home service plan brands like American Home Shield, HSA, Landmark and OneGuard. FTDR is headquartered in Memphis, TN, and provides home warranties in the United States.

FTDR is focusing on increasing and retaining Home Warranty Members and boosting Non-Warranty revenues. On the last earnings call, it stated that the integration of the 2-10 acquisition was moving ahead of schedule. Emphasis on boosting its member base, especially in the DTC channel, has been driving growth. DTC member count was up 9% (organic basis) in the second quarter of 2025.

Revenues in the second quarter of 2025 came in at $617 million, up 14% year over year. The uptick was driven by a 2% increase in price and 12% higher volume. The higher volume was driven by the 2-10 acquisition. Real estate revenues increased 21%. Further, the number of home warranties was 2.09 million, up 7% year over year. The gross margin expanded 130 basis points to 58%.

The Zacks Consensus Estimate for 2025 earnings is pegged at $3.90 per share, unchanged in the past seven days. FTDR has a Growth Score of A and a trailing four-quarter earnings surprise of 66.4%, on average.

Willdan provides services such as professional, technical and consulting to government agencies, utilities and private industry. It has a wide-ranging product portfolio encompassing energy policy planning and advisory services, energy efficiency and sustainability, engineering and planning, electric grid solutions and municipal financial consulting services.

Strengthening electric load growth, driven by higher electricity demand at data centers, owing to the proliferation of artificial intelligence and broader electrification trends, bodes well. WLDN is gaining from momentum in core programs and new contract wins. Synergies from strategic acquisitions are another plus. Contract revenues in the last reported quarter jumped 23% year over year, while net revenues were up 31.1%.

For 2025, Willdan expects net revenues to be between $340 million and $350 million, while adjusted EBITDA is expected to be in the range of $70-$73 million. Recently, WLDN won a two-year, $15 million contract from Southern California Regional Energy Network to provide energy efficiency services for their commercial portfolio.

The Zacks Consensus Estimate for WLDN’s 2025 earnings is pegged at $3.60 per share, unchanged in the past seven days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 53.96%, on average.

Zumiez is a specialty retailer for a range of apparel, footwear and accessories. Its stores also feature a range of hard goods for youngsters, which include items like snowboards, skateboards, bindings and other equipment.

ZUMZ recently reported fiscal second-quarter 2025 results, wherein total net sales of $214.3 million surpassed the Zacks Consensus Estimate of $211 million and increased 1.9% from the prior-year quarter. North America remains the key catalyst of Zumiez’s performance despite heightened macroeconomic uncertainty, influenced by evolving trade policy developments. In the fiscal second quarter, this region generated $180 million in sales, up 2.1% from the prior year.

Comps were up 2.5% year over year, representing the fifth consecutive quarter of growth. Comps in North America rose 4.2%, representing the sixth consecutive quarter of growth, while international comps declined 5.5%. Among product categories, the women’s category saw the highest comps increase, followed by hard goods and accessories. Conversely, footwear was the largest negative comps category, followed by men’s.

The Zacks Consensus Estimate for ZUMZ’s fiscal 2025 earnings is pegged at 42 cents per share, unchanged in the past seven days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 35.4%, on average.

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