Gold Fields Ltd. (NYSE:GFI) Embodies the GARP Strategy with Strong Growth and Valuation

Investors looking for growth chances at fair prices often use the Growth At Reasonable Price (GARP) method, which focuses on companies showing solid development potential without high prices. This method mixes the search for fast earnings increases with fundamental rules, steering clear of both costly momentum stocks and deep value traps. The "Affordable Growth" screening process finds stocks with growth ratings over 7, valuation scores above 5, and good profitability and health measures, forming a mixed system for lasting investment picks.

Gold Fields Ltd. (NYSE:GFI) offers a strong example inside this investment system. The gold mining company works in several continents with a varied set of mining properties, giving access to precious metals while keeping operational variety. Its fundamental picture shows why it meets the affordable growth screening rules, especially via its mix of development momentum and fair valuation.

Growth Path

The company shows notable development in important financial measures, reaching the growth rating of 8 needed by the affordable growth screen. This number shows good momentum in both past results and future estimates:

• Earnings Per Share jumped 196.68% over the last year, with an average yearly growth rate of 48.07% over recent years
• Revenue grew 50.41% in the last year, keeping an 11.88% compound yearly growth rate over several years
• Forward estimates show expected EPS growth of 35.90% each year together with 18.65% yearly revenue increase

This solid growth picture meets the screening need for companies showing better-than-average development potential, a key part for GARP investors looking for companies that can provide rising earnings without depending only on future estimates.

Valuation Check

Gold Fields gets a valuation rating of 8, easily passing the screen's lowest limit of 5. Several valuation measures back this check:

• Forward P/E ratio of 11.02 looks good compared to industry average of 28.74 and S&P 500 average of 23.21
• Enterprise Value to EBITDA puts the company less expensive than 80% of industry peers
• Price/Free Cash Flow ratio sits lower than 78% of other mining companies
• PEG ratio shows payment for growth stays fair even with strong earnings increase

The valuation measures show why the stock fits the "affordable" part of the screening rules, trading at multiples that do not completely show its growth path while staying competitive inside its sector.

Profitability Level

With a profitability rating of 9, Gold Fields passes the screening need for good profitability by a large amount. The company's operational effectiveness shows in several measures:

• Return on Invested Capital of 22.56% does better than 98% of industry rivals
• Profit margin of 28.72% is higher than 92% of mining sector peers
• Operating margin of 53.08% sits with the industry's top performers
• Steady positive earnings and operating cash flow over five years show business model strength

These profitability measures give important support for the affordable growth idea, showing that development is happening together with operational effectiveness instead of through margin-losing growth projects.

Financial Condition

The company's health rating of 7 meets the screening need for good financial steadiness. Key solvency measures show a balanced way to growth funding:

• Altman-Z score of 7.06 shows very low bankruptcy danger
• Debt to Free Cash Flow ratio of 2.08 years shows strong repayment ability
• Debt to Equity ratio of 0.41 shows careful leverage compared to industry standards
• Current and quick ratios above 1.8 give enough short-term cash coverage

This financial base supports lasting growth by making sure the company can pay for development without high risk, an important point for GARP investors centered on long-term compounding.

The full fundamental study available through the Gold Fields Ltd. fundamental report gives more detail into these measures and their meaning for long-term investors. The company's mix of speeding growth, fair valuation, high profitability, and good financial condition makes a picture that fits well with affordable growth investment rules.

Investors curious about finding more companies meeting similar affordable growth rules can look at further screening results using the Affordable Growth Stock Screener, which finds other possible picks using the same fundamental rating settings.

Disclaimer: This study is based on fundamental measures and screening rules for information only. It does not form investment advice, suggestion, or support of any security. Investors should do their own study and talk with financial advisors before making investment choices. Past results do not promise future outcomes, and all investments have risk including possible loss of original money.