FLUOR CORP (NYSE:FLR) - A GARP Candidate Worth Considering

FLUOR CORP (NYSE:FLR) emerged from our Peter Lynch-inspired screen as a potential candidate for long-term investors seeking growth at a reasonable price. The company, which provides engineering and construction services across energy, urban infrastructure, and government projects, meets several key criteria for sustainable growth and sound financial health.

Why FLR Fits the GARP Approach

• Strong Historical Growth: FLR’s earnings per share (EPS) have grown at an average annual rate of 27.7% over the past five years, well above the 15% minimum threshold in our screen. While past performance doesn’t guarantee future results, this suggests the company has demonstrated an ability to expand profitability.
• Reasonable Valuation: With a PEG ratio (price/earnings-to-growth) of 0.60, FLR appears attractively priced relative to its growth trajectory. A PEG below 1 often indicates undervaluation when accounting for earnings expansion.
• Healthy Profitability: The company’s return on equity (ROE) stands at 51.4%, significantly higher than the 15% minimum required by the screen. This suggests efficient use of shareholder capital.
• Solid Financial Position: FLR maintains a debt-to-equity ratio of 0.30, well below the 0.6 threshold, indicating a conservative capital structure. Its current ratio of 1.74 also reflects sufficient liquidity to cover short-term obligations.

Fundamental Snapshot

Our fundamental analysis rates FLR 5 out of 10, reflecting a mixed but promising profile:

• Strengths: High ROE, manageable debt, and improving operating margins.
• Challenges: Recent earnings volatility and below-industry-average ROIC (return on invested capital).
• Valuation: FLR trades at a P/E of 16.5, cheaper than 86% of its peers in the construction and engineering sector.

For a deeper dive, review the full fundamental report on FLR.

Our Peter Lynch Strategy screener lists more stocks matching these criteria and is updated regularly.

Disclaimer

This is not investing advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.