ENERSYS (NYSE:ENS) - A Strong Candidate for GARP Investors

ENERSYS (NYSE:ENS) stands out as a compelling pick for investors seeking growth at a reasonable price (GARP). The company, a provider of stored energy solutions for industrial applications, meets key criteria from Peter Lynch’s investment strategy, combining steady growth, solid profitability, and an attractive valuation.

Why ENERSYS Fits the GARP Approach

• Sustainable Growth: ENS has delivered a 5-year average EPS growth of 16.8%, within Lynch’s preferred range of 15-30%. This indicates steady, manageable expansion rather than overheated growth.
• Reasonable Valuation: With a PEG ratio (5Y) of 0.49, well below the ideal threshold of 1, ENS appears undervalued relative to its earnings growth. The P/E ratio of 8.26 further supports this, trading at a discount to both industry and S&P 500 averages.
• Strong Profitability: The company boasts an ROE of 18.98%, exceeding Lynch’s 15% benchmark, and outperforms nearly 90% of its peers in the electrical equipment sector.
• Healthy Financials: ENS maintains a current ratio of 2.7 and a debt-to-equity ratio of 0.57, reflecting a balanced capital structure and liquidity to meet short-term obligations.

Fundamental Snapshot

ENS earns a 7/10 in our fundamental analysis, scoring highly on profitability and valuation but with minor concerns around debt levels. Its consistent earnings growth, improving margins, and reliable dividend history (10+ years) reinforce its appeal for long-term investors.

For a deeper dive, review the full fundamental analysis report.

Our Peter Lynch Strategy screener lists more stocks matching these criteria 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.