FLUOR CORP (NYSE:FLR) - A Strong Contender for GARP Investors

FLUOR CORP (NYSE:FLR) stands out as a potential candidate for investors seeking growth at a reasonable price (GARP). The company, which provides engineering, procurement, and construction services across energy, urban, and mission solutions, meets several key criteria outlined in Peter Lynch’s investment strategy. Below, we examine why FLR could fit well in a long-term portfolio.

Key Metrics Supporting FLR’s GARP Potential

• Earnings Growth: FLR has delivered a 5-year average EPS growth of 27.7%, well above the 15% minimum threshold in Lynch’s strategy. While recent EPS growth has slowed, analysts expect a rebound with 12.6% annual growth in the coming years.
• Reasonable Valuation: The stock’s PEG ratio (5-year) of 0.75 suggests it is undervalued relative to its growth, a hallmark of Lynch’s approach.
• Strong Profitability: FLR’s return on equity (ROE) of 51.4% far exceeds the 15% benchmark, indicating efficient use of shareholder capital.
• Healthy Balance Sheet: With a debt-to-equity ratio of 0.30, the company maintains a conservative capital structure, reducing financial risk.
• Liquidity Strength: A current ratio of 1.74 reflects solid short-term financial health, ensuring the company can meet its obligations.

Fundamental Analysis Summary

FLR earns a fundamental rating of 5/10, with strengths in financial health and profitability but mixed results in valuation and growth. The company outperforms most peers in ROE and profit margins, though operating margins lag. For a deeper dive, review the full fundamental analysis report.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own research and invest based on your analysis.