TECHNIPFMC PLC (NYSE:FTI) – A Strong Candidate for GARP Investors

TECHNIPFMC PLC (NYSE:FTI) stands out as a potential fit for investors seeking growth at a reasonable price (GARP). The company, which provides energy services and solutions, meets key criteria from Peter Lynch’s investment strategy, balancing solid growth with sound financial health and reasonable valuation.

Key Strengths

• Strong Earnings Growth: Over the past five years, FTI has delivered an average annual EPS growth of 24.99%, well above the 15% threshold in Lynch’s criteria. Recent growth has been even more impressive, with EPS up 189.55% year-over-year.
• Attractive Valuation: The PEG ratio (0.71) is below 1, indicating the stock is reasonably priced relative to its growth. The P/E ratio of 17.79 is slightly below the S&P 500 average, suggesting room for upside.
• Healthy Profitability: Return on Equity (ROE) stands at 26.99%, far exceeding the 15% benchmark, while Return on Invested Capital (ROIC) is a solid 13.08%. Margins have also improved in recent years.
• Conservative Debt Levels: With a debt-to-equity ratio of just 0.17, FTI maintains a strong balance sheet, well below Lynch’s preferred threshold of 0.6.
• Positive Cash Flow: The company has consistently generated positive operating cash flow, supporting its ability to sustain growth and meet obligations.

Considerations

While FTI scores well on profitability and debt management, its liquidity metrics (current ratio of 1.07, quick ratio of 0.82) are weaker than industry peers. Additionally, dividend payouts have declined, though this may reflect a focus on reinvesting in growth.

For a deeper look, review the full fundamental analysis of FTI.

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 data available at the time of writing. Always conduct your own research before making investment decisions.