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

TECHNIPFMC PLC (NYSE:FTI) stands out as a potential candidate for investors seeking long-term growth at a reasonable price (GARP). The company, which provides energy services and solutions for hydrocarbon production, meets several key criteria from Peter Lynch’s investment strategy, including strong profitability, manageable debt, and sustainable growth.

Why FTI Fits the GARP Approach

• Earnings Growth: FTI has delivered an impressive 5-year average EPS growth of 24.99%, well above the 15% minimum threshold in Lynch’s strategy. This indicates consistent and sustainable expansion.
• Attractive Valuation: With a PEG ratio (5Y) of 0.72, the stock is priced reasonably relative to its growth, a hallmark of Lynch’s approach. A PEG below 1 suggests the market may be undervaluing its growth potential.
• Strong Profitability: The company’s return on equity (ROE) of 26.99% far exceeds the 15% benchmark, reflecting efficient use of shareholder capital.
• Healthy Balance Sheet: FTI maintains a conservative debt-to-equity ratio of 0.17, well below Lynch’s preferred 0.25, indicating financial stability.
• Liquidity: The current ratio of 1.07 shows the company can comfortably cover short-term obligations.

Fundamental Snapshot

Our fundamental analysis assigns FTI a rating of 6 out of 10, highlighting strengths in profitability and valuation, though with minor concerns in liquidity. Key takeaways:

• Profitability: Strong ROE and ROIC place FTI in the top tier of its industry.
• Valuation: While the P/E ratio appears slightly elevated, the PEG ratio justifies the price given growth expectations.
• Growth Outlook: Analysts project continued EPS growth of 10.14% annually, supported by stable revenue expansion.

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

Our Peter Lynch Strategy screener lists more stocks that align with this strategy and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.