BJ'S WHOLESALE CLUB HOLDINGS (NYSE:BJ) stands out as a potential candidate for quality investors, meeting several key criteria for long-term investment. The company operates membership warehouse clubs, offering a broad range of goods from groceries to general merchandise. Our Caviar Cruise screen identified BJ due to its strong fundamentals, profitability, and disciplined financial management.
Why BJ Fits the Quality Investing Criteria
- Revenue and EBIT Growth – Over the past five years, BJ has delivered consistent revenue growth (5.67% CAGR) and even stronger EBIT growth (16.42% CAGR). This indicates improving operational efficiency and pricing power.
- High Return on Invested Capital (ROIC) – With an ROIC of 16.64%, BJ effectively generates strong returns from its capital investments, outperforming many industry peers.
- Healthy Debt Management – The company’s debt-to-free cash flow ratio of 1.83 suggests it could repay all outstanding debt in under two years, reflecting financial stability.
- Profit Quality – BJ converts 91.23% of its net income into free cash flow, demonstrating reliable earnings quality and efficient cash generation.
Fundamental Analysis Summary
BJ scores well in profitability (8/10) and financial health (7/10), with high marks for return on equity (28.93%) and solvency. While its valuation appears expensive (P/E of 29.40), the company’s strong fundamentals may justify the premium. Analysts expect continued earnings growth (10.87% annually), reinforcing its appeal for long-term investors.
Our Caviar Cruise screener lists more quality stocks updated daily. For a deeper dive, review the full fundamental report on BJ.
Disclaimer
This is not investing advice! The observations here are based on current data, but investors should conduct their own research before making decisions.
