DHT HOLDINGS INC (NYSE:DHT) emerged from our Peter Lynch-inspired screen as a potential candidate for long-term investors seeking growth at a reasonable price. The company operates a fleet of crude oil tankers and demonstrates a combination of solid financial health, profitability, and attractive valuation. Below, we examine why DHT fits the criteria for GARP investors.
Key Strengths of DHT Holdings
- Earnings Growth: DHT has delivered a five-year average EPS growth of 16.14%, aligning with Peter Lynch’s preference for sustainable but not excessive growth.
- Reasonable Valuation: With a PEG ratio of 0.46 (well below the preferred threshold of 1), the stock appears undervalued relative to its growth prospects.
- Strong Profitability: The company’s return on equity (ROE) stands at 16.90%, exceeding the 15% benchmark Lynch favored.
- Healthy Balance Sheet: A debt-to-equity ratio of 0.27 indicates conservative leverage, while a current ratio of 1.59 suggests sufficient liquidity.
- Dividend Appeal: DHT offers a 7.16% dividend yield, though investors should note that the payout ratio is high, which may affect sustainability.
Fundamental Analysis Summary
Our fundamental report assigns DHT a rating of 7 out of 10, highlighting its strong profitability and financial health. The company outperforms most peers in return on assets (12.25%) and operating margin (28.79%). While revenue growth has been modest, earnings are expected to accelerate, with projected EPS growth of 31.23% in the coming years.
For a deeper look, review the full fundamental analysis report.
Our Peter Lynch Strategy screener lists more stocks that fit this investment approach and is updated regularly.
Disclaimer
This is not investment advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.
