EAGLE MATERIALS INC (NYSE:EXP) Stands Out as a Quality Investment Candidate in Caviar Cruise Screen

The Caviar Cruise screening method is a structured way to find good companies for long-term investment. This plan, based on the ideas of Belgian author Luc Kroeze concerning quality investing, looks for businesses with steady revenue and profit increases, high returns on invested capital, strong cash flow generation, and acceptable debt levels. Investors using this method look for companies with lasting competitive strengths and business models that can produce growing returns over many years.

Eagle Materials Inc (NYSE:EXP) appears as a noteworthy candidate from this screening process, showing several traits that match quality investing ideas.

Financial Performance and Profitability

Eagle Materials shows solid financial numbers that meet several Caviar Cruise requirements. The company's EBIT growth of 15.68% over the last five years is much higher than the screen's 5% minimum, pointing to good operational performance gains. This number is especially important for quality investors because it shows core business efficiency without being affected by financial structuring or tax factors.

The company's profitability is notable with several strong numbers:

• Operating margin of 26.04%, better than 92% of similar companies
• Profit margin of 19.81%, one of the best in the construction materials field
• Return on equity of 30.36%, at the high end of its industry

These margin numbers show Eagle Materials' skill in turning revenue into profits effectively, a main trait of good businesses with pricing strength and operational skill.

Capital Efficiency and Returns

A central part of the Caviar Cruise method is capital efficiency, measured by return on invested capital. Eagle Materials achieves a ROIC excluding cash, goodwill, and intangibles of 18.72%, well above the 15% level needed by the screen. This number is vital for quality investors as it shows how well management uses capital to create returns, distinguishing real operational performance from accounting changes.

The company's profit quality score of 110.92% over five years is much higher than the 75% standard, showing better conversion of accounting profits into real cash flow. This trait gives financial room for strategic projects while lowering the need for outside financing.

Financial Health and Debt Management

Eagle Materials keeps a steady financial setup with a debt-to-free cash flow ratio of 4.17 years, within the acceptable 0-5 year range set by the Caviar Cruise screen. This ratio shows the company's capacity to handle its debts from operational cash flows, lowering financial risk for long-term investors.

Other financial health signs include:

• Current ratio of 2.73, showing good short-term liquidity
• Altman-Z score of 4.47, indicating low bankruptcy risk
• Steady decrease in shares outstanding over one and five-year periods

Growth Path and Industry Standing

While recent revenue growth has slowed, Eagle Materials has shown a 9.99% yearly revenue growth rate over recent years. The company works across eight cement plants, 30 distribution terminals, and many wallboard and concrete facilities across the country, supplying necessary materials for commercial, residential, and infrastructure projects. This varied operational presence in important construction areas supports business stability.

Fundamental Assessment Summary

According to Chartmill's detailed review, Eagle Materials gets a fundamental rating of 6 out of 10, with special ability in profitability (score 8) and financial health (score 7). The full fundamental analysis report explains how the company compares well against similar firms in many areas, including margin performance, capital efficiency, and solvency numbers.

Valuation Factors

From a valuation viewpoint, Eagle Materials trades at a P/E ratio of 17.35, which seems fair compared to both the S&P 500 average and similar companies. The company's Price/Free Cash Flow ratio is especially interesting, valued lower than 92% of industry rivals. While quality investors usually favor business quality over pure valuation, Eagle Materials seems reasonably priced given its strong fundamental traits.

For investors wanting to look at more companies that fit the Caviar Cruise quality requirements, the complete screening results offer a beginning for more study.

Eagle Materials shows many features appreciated by quality investors, including strong capital returns, good cash flow creation, and careful financial management. The company's place in necessary construction materials, along with its operational efficiency and financial discipline, fits with the long-term view of the Caviar Cruise method. As with any investment, potential investors should perform complete research thinking about their own financial goals and risk comfort.

This review is for information only and is not investment advice, a suggestion, or a support of any security. Investors should do their own study and talk with financial advisors before making investment choices. Past results do not ensure future outcomes.