APOGEE ENTERPRISES INC (NASDAQ:APOG) was identified by our Peter Lynch-inspired stock screener as a potential candidate for growth at a reasonable price (GARP) investors. The company operates in the architectural products and services sector, with a focus on sustainable, long-term growth. Below, we examine why APOG fits the criteria for this investment approach.
Key Metrics Aligning with Peter Lynch’s Strategy
- Earnings Growth: APOG has delivered a 5-year average EPS growth of 15.82%, meeting Lynch’s preference for sustainable but not excessive growth (between 15% and 30%).
- Reasonable Valuation: With a PEG ratio of 0.49 (well below Lynch’s threshold of 1), the stock appears undervalued relative to its growth.
- Strong Profitability: The company’s return on equity (ROE) stands at 17.43%, exceeding the 15% minimum Lynch favored.
- Healthy Balance Sheet: APOG’s debt-to-equity ratio of 0.58 is within Lynch’s recommended range (below 0.6), indicating manageable leverage.
- Liquidity: A current ratio of 1.55 suggests the company can comfortably meet short-term obligations.
Fundamental Overview
APOG’s financial health is stable, with consistent profitability and a reasonable valuation. The company’s dividend yield of 2.65% is above the industry average, supported by a 10-year track record of dividend growth. While revenue growth has been modest, the firm’s margins have improved in recent years.
For a deeper dive, review the full fundamental analysis of APOG.
Why It Fits a GARP Strategy
APOG combines steady earnings growth with an attractive valuation, making it a candidate for investors seeking balanced exposure to growth and value. The company’s focus on architectural solutions—a stable but often overlooked industry—aligns with Lynch’s preference for "dull" businesses with reliable demand.
Our Peter Lynch Strategy screener lists more stocks that meet these criteria and is updated regularly.
Disclaimer
This is not investing advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.
