DONNELLEY FINANCIAL SOLUTIONS (NYSE:DFIN) – A Strong Candidate for GARP Investors

DONNELLEY FINANCIAL SOLUTIONS (NYSE:DFIN) emerged from our Peter Lynch-inspired screen as a stock with attractive growth potential at a reasonable valuation. The company, which provides regulatory and compliance solutions for financial markets, demonstrates solid fundamentals that align with the principles of growth at a reasonable price (GARP) investing.

Key Strengths

• Earnings Growth: DFIN has delivered strong earnings per share (EPS) growth, averaging 24.57% annually over the past five years, comfortably within Lynch’s preferred range of 15-30%.
• Reasonable Valuation: With a PEG ratio of 0.65 (well below the target threshold of 1), the stock appears undervalued relative to its growth prospects.
• Healthy Profitability: The company’s return on equity (ROE) stands at 21.46%, indicating efficient use of shareholder capital.
• Solid Financial Health: DFIN maintains a debt-to-equity ratio of 0.44, below the screen’s 0.6 limit, and a current ratio of 1.24, suggesting sufficient liquidity.

Fundamental Highlights

Our analysis assigns DFIN a fundamental rating of 6/10, with strong marks in profitability and financial health. The company outperforms most peers in key metrics like return on invested capital (ROIC) and debt management. While revenue growth has been modest, earnings expansion remains robust, supported by improving margins.

For a deeper dive into the numbers, review the full fundamental report.

Our Peter Lynch Strategy screener identifies more stocks fitting this disciplined approach.

Disclaimer

This is not investing advice. The observations here reflect conditions at the time of writing, and investors should conduct their own research before making decisions.