Deckers Outdoor Corp (NYSE:DECK) Identified as a Top Quality Stock by Caviar Cruise Screen

For investors looking to assemble a portfolio of lasting, high-achieving businesses, the quality investing philosophy offers a strong framework. This method centers on finding companies with durable competitive strengths, sound financial condition, and the capacity to produce outstanding returns on capital over many years. One organized way to find these companies is the "Caviar Cruise" stock screen, which selects for firms showing steady revenue and profit increase, high returns on invested capital, strong cash flow production, and a prudent debt level. The aim is not to locate temporary discounts, but to hold outstanding businesses for the long term.

A recent use of this method has identified Deckers Outdoor Corp (NYSE:DECK) as a leading example for more review by investors focused on quality. The footwear and apparel company, known for its UGG and HOKA brands, seems to satisfy the strict numerical standards that point to a well-managed, financially sound firm.

Satisfying the Main Quality Standards

The Caviar Cruise screen uses several important filters to distinguish quality companies from the wider market. Deckers Outdoor's financial measures match these standards closely:

• High Profitability and Capital Effectiveness: A central part of quality investing is a high Return on Invested Capital (ROIC), which gauges how well a company produces profits from its capital foundation. The screen demands an ROIC (excluding cash, goodwill, and intangibles) over 15%. Deckers greatly surpasses this, with a stated ROICexgc of 69.8%. This shows a notable capacity to change invested capital into earnings, a mark of significant brand power and operational skill.

• Steady and High-Standard Increase: The method looks for companies with a confirmed history of increase, where profit growth exceeds sales growth—a sign of better margins and pricing ability. Deckers' 5-year EBIT (Earnings Before Interest and Taxes) Compound Annual Growth Rate (CAGR) of 28.3% is much greater than its 5-year revenue CAGR of 7.5%. This difference points out the company's achievement in enlarging profitability, probably through brand elevation and operational scale.

• Notable Financial Condition and Cash Flow: Quality companies should be financially solid, with the ability to handle debt comfortably and turn accounting profits into actual cash. The screen selects for a Debt-to-Free Cash Flow ratio under 5. Notably, Deckers states a ratio of 0.0, meaning it has no net debt. Also, its average Profit Quality over five years—gauging how much net income becomes free cash flow—is 97.2%, above the 75% minimum. This confirms that the company's earnings are supported by firm, usable cash production.

A Top-Level Fundamental Overview

An examination of Deckers' wider fundamental analysis report supports the image shown by the screen. The company receives a firm overall fundamental score of 7 out of 10. Its notable characteristics include:

• Profitability: Scored as "excellent" (9/10), with sector-leading margins and returns (ROE of 41.2%, Profit Margin of 19.4%).
• Financial Condition: Scored a perfect 10/10, aided by a strong balance sheet with no debt, high liquidity ratios, and an Altman-Z score showing very low bankruptcy chance.
• Valuation: Seems fairly valued compared to both its sector and the wider S&P 500, with a P/E ratio of 15.3.
• Increase: While past increase has been firm, analyst projections suggest a slowing in the pace of future revenue and earnings growth, which is a factor for investors to watch.

You can review the complete, itemized separation of these measures in the detailed fundamental analysis report for DECK.

Fit with Quality Investing Ideas

Beyond the figures, Deckers' business profile fits the non-numerical qualities wanted by quality investors. The company runs powerful, category-leading brands (UGG and HOKA) that create customer devotion and pricing ability—a clear competitive edge. Its attention on lifestyle and performance areas connects with lasting consumer patterns. The company's lack of debt gives great adaptability to manage economic changes, fund new ideas, and give capital back to shareholders, all signs of a durable firm built for the long term.

For investors interested in this method, the Caviar Cruise screen can act as a beginning for more study. You can see the present outcomes of this quality stock screen and change its settings here.

Disclaimer: This article is for information only and does not form financial guidance, a suggestion, or an offer to buy or sell any security. Investing carries risk, including the possible loss of principal. Readers should perform their own complete investigation and speak with a qualified financial advisor before making any investment choices.