CARETRUST REIT INC (NYSE:CTRE) has appeared as an interesting candidate through an Affordable Growth screening method, which finds companies showing strong expansion possibility while keeping sensible prices. This method looks for stocks with growth ratings above 7, good profitability and financial health numbers, and valuation scores over 5, forming a system for finding Growth At Reasonable Price chances. The plan intends to balance the search for companies with notable expansion possibility while steering clear of expensive positions that might hurt investment returns.
Growth Path
CareTrust REIT shows very good growth traits that make up the center of its investment attraction. The company's expansion numbers are much higher than industry standards and display gaining speed in important financial areas.
• Earnings Per Share rose 90.28% in the past year, with a steady yearly growth rate of 11.30% over several years • Revenue grew by 59.24% in the most recent year, keeping a good 12.64% compound annual growth rate • Future estimates point to speeding growth with EPS likely to rise 26.18% each year and revenue growth expected at 27.43%
The growth part is especially important for affordable growth investing as it finds companies with large expansion possibility that can push future share price gains. CareTrust's speeding growth trend, paired with strong future estimates, places it well inside the screening rules that favor companies with shown and predicted above-average expansion.
Valuation Review
The REIT shows a detailed valuation picture that balances current numbers against growth outlooks. While some standard valuation measures seem high, the situation shows a more sensible placement when growth possibilities are thought about.
• Price/Earnings ratio of 26.42 is near S&P 500 averages but shows a lower price than industry peers • Forward P/E of 23.05 looks good against both industry averages and wider market multiples • PEG ratio shows payment for growth, hinting the valuation could be explained by expansion possibility
For affordable growth plans, valuation review goes further than simple multiples to think about what investors are paying for future growth. CareTrust's valuation becomes more interesting when examined this way, as the market seems to be setting the stock's price sensibly compared to its large growth path and industry standing.
Profitability and Financial Health
The company's operational strength and financial steadiness give important base support for its growth narrative. CareTrust keeps profitability numbers that are near the top of industry leaders while showing careful financial handling.
Profitability points include: • Very high profit margin of 60.84% does better than 97.66% of industry peers • Operating margin of 66.50% is in the top group of diversified REITs • Return on invested capital of 4.58% is more than 90.63% of industry rivals
Financial health signs show: • Good cash position with current and quick ratios of 4.05 • Careful debt-to-equity ratio of 0.22 showing little borrowing use • Altman-Z score of 4.72 pointing to low bankruptcy chance
These profitability and health numbers are key parts of the affordable growth system, as they make sure that growth is lasting and not reached through too much risk or financial tricks. CareTrust's mix of industry-topping margins and careful financial setup backs continued expansion without losing steadiness.
Investment Points
CareTrust REIT stands as an interesting example in affordable growth investing, mixing good expansion numbers with sensible valuation in the healthcare real estate field. The company's detailed fundamental analysis shows a balanced profile where strong growth is backed by solid operational performance and financial control. The REIT setup gives more attraction through dividend payments, though investors should see the current payout ratio might limit short-term dividend growth possibility.
For investors looking for like affordable growth chances, more screening results can be found using the Affordable Growth stock screener, which finds companies fitting these particular growth, valuation, profitability, and health rules.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance does not guarantee future results.
