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, procurement, and construction services, meets several key criteria that align with Lynch’s investment philosophy.

Why FLR Fits the GARP Approach

• Strong Earnings Growth: FLR has delivered an impressive 5-year average EPS growth of 27.7%, well above the 15% minimum threshold in our screen. While past growth doesn’t guarantee future performance, this suggests the company has been able to expand profitability effectively.
• Reasonable Valuation: The PEG ratio (0.70) indicates the stock is priced attractively relative to its earnings growth, staying below the preferred threshold of 1. This implies investors aren’t overpaying for future growth potential.
• Healthy Balance Sheet: With a debt-to-equity ratio of 0.30, FLR maintains a conservative capital structure, reducing financial risk. The current ratio of 1.74 also reflects solid liquidity, ensuring the company can meet short-term obligations.
• High Return on Equity: FLR’s ROE of 51.4% stands out, signaling efficient use of shareholder capital and strong profitability.

Fundamental Snapshot

FLR’s fundamental report highlights a mixed but promising profile:

• Profitability: While margins are improving, the gross margin remains below industry peers. However, FLR excels in return metrics like ROE and ROA.
• Valuation: The stock appears reasonably priced compared to both its industry and the broader market, with a P/E ratio of 19.3.
• Growth Outlook: Analysts project steady EPS growth of 12.6% annually, supported by a rebound in revenue growth expectations.

Our Peter Lynch Strategy screener lists more stocks that fit this strategy and is updated regularly.

Disclaimer

This is not investing advice! The observations here are based on current data, but investors should conduct their own research before making decisions.