A quick way to get a handle on a company’s profitability is to review EPS growth rates. After all, this indicator is intertwined with stock price fluctuations. With this in mind, we wanted to find tech companies at the mid cap level with demonstrated profitability as shown by a substantial increase in their EPS growth rates over the past year. Tech companies of this size tend to offer greater protection from risk than small caps, which also ups their appeal. Further, the companies included in our list have not leveraged their assets to fund their expansion. We think you will like this list of profitable tech stocks with minimal debt.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the stock price, as it directly correlates to the profitability of the company as a whole.

The Operating Profit Margin is a profitability ratio that measures the effectiveness of the company’s operating efficiency. This metric allows investors to see how much profit is left after all variable costs are covered. If the company’s margin is increasing over time, this means that it’s earning more per dollar of sales. Finding trends in the Operating Profit Margin helps investors identify companies that are improving profitability over time and managing the economic landscape better than their competitors.

The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company’s potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company’s long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company’s risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.

We first looked for mid cap technology stocks. We next screened for businesses that have shown strong bottom line growth over the last year (1-year fiscal EPS growth rate>10%)(1-year operating margin>15%). From here, we then looked for companies that have maintained a sound capital structure (D/E Ratio<.1). We then looked for companies that have maintained a sound long term capital structure (Long Term D/E Ratio<.1).

Do you think these mid-cap stocks have what it takes to grow? Use our list along with your own analysis.