Accenture PLC-CL A (NYSE:ACN) Meets Caviar Cruise Standards for High-Quality Long-Term Investing

The Caviar Cruise stock screening strategy is designed to find high-quality companies ideal for long-term, buy-and-hold investing. Inspired by quality investing principles, this method focuses on firms with steady revenue and profit growth, high returns on invested capital, low debt, and reliable cash flow. The strategy uses measurable financial metrics to select companies with lasting competitive strengths, efficient operations, and sound finances.

One company that fits these strict standards is ACCENTURE PLC-CL A (NYSE:ACN). This global professional services firm displays the traits of a quality investment, making it a strong choice for investors looking for stable businesses with solid fundamentals.

Why Accenture Meets the Caviar Cruise Standards

1. Steady Revenue and EBIT Growth

• Revenue Growth (5Y CAGR): 6.19% – Above the screen’s minimum requirement of 5%, showing consistent top-line growth.
• EBIT Growth (5Y CAGR): 9.74% – Higher than revenue growth, suggesting better profitability and operational efficiency.

Why It Matters: Investors focused on quality look for companies with both revenue and profit growth, as this points to pricing strength, scale benefits, and good cost control.

2. High Return on Invested Capital (ROIC)

• ROIC (Excluding Cash & Goodwill): 77.09% – Well above the 15% threshold, indicating excellent use of capital.

Why It Matters: A high ROIC shows the company earns strong returns on its investments, a sign of lasting competitive strengths.

3. Reliable Free Cash Flow and Low Debt

• Debt-to-Free Cash Flow: 0.50 – Far below the screen’s maximum of 5, meaning Accenture could clear its debt in six months using current cash flows.
• Profit Quality (5Y Avg.): 133.8% – Shows net income is fully converted into free cash flow, confirming earnings reliability.

Why It Matters: Low debt and high cash flow conversion lower financial risk and allow flexibility for reinvestment, dividends, or share buybacks.

4. Consistent Profitability and Margins

• Operating Margin: 15.53% – In the top 16% of the IT Services industry.
• Net Profit Margin: 11.61% – Better than 84% of peers, reflecting pricing strength and cost management.

Why It Matters: Stable or growing margins suggest a business model that can maintain profitability in different economic conditions.

Fundamental Analysis Overview

Accenture’s fundamental report confirms its fit for quality investors:

• Profitability (8/10): High ROIC, strong margins, and steady earnings.
• Financial Health (7/10): Low debt, strong solvency, and good liquidity.
• Growth (4/10): Past growth has been solid, though future expectations are more modest, typical of mature quality firms.
• Valuation (5/10): Priced higher relative to earnings, but justified by profitability and stability.

Finding More Quality Investment Options

For investors interested in other companies that meet the Caviar Cruise criteria, the full screening results are available here.

Final Thoughts

Accenture’s strong financials, careful capital use, and global presence align with the Caviar Cruise strategy’s focus on durable, high-quality businesses. While valuation is a factor, its financial strength and competitive advantages make it a solid choice for long-term investors.

Disclaimer: This article is not investment advice. Always do your own research or consult a financial advisor before making investment decisions.