DONNELLEY FINANCIAL SOLUTION (NYSE:DFIN) emerged from our Peter Lynch-inspired screen as a potential fit for investors seeking long-term growth at a reasonable price. The company, which provides financial regulatory and compliance software solutions, meets several key criteria for sustainable growth and sound financial health.
Why DFIN Fits the Peter Lynch Strategy
- Earnings Growth: DFIN has delivered strong earnings growth, with a 5-year EPS growth rate of 24.57%. This aligns with Lynch’s preference for companies growing steadily but not excessively.
- Attractive Valuation: The stock’s PEG ratio (0.59) is well below 1, indicating it is reasonably priced relative to its growth prospects.
- Healthy Balance Sheet: With a debt-to-equity ratio of 0.44 and a current ratio of 1.24, the company maintains a solid financial position.
- Profitability: DFIN’s return on equity (ROE) of 21.46% reflects efficient use of shareholder capital, a key metric for Lynch.
Fundamental Strengths
Our analysis highlights DFIN’s strong profitability and financial health. The company outperforms most peers in return on assets (10.57%) and return on invested capital (17.70%). While revenue growth has been modest, earnings are expected to grow by nearly 14% annually in the coming years.
For a deeper look, review the full fundamental report on DFIN.
Our Peter Lynch Strategy screener provides more stocks that fit this investment approach.
Disclaimer
This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.
