ICF International Inc (NASDAQ:ICFI) Identified as a Quality Investment by Caviar Cruise Screen

Professional services firm ICF International Inc (NASDAQ:ICFI) has been identified by an investment screening process aimed at finding good companies with lasting business structures. The Caviar Cruise screening strategy, based on Belgian author Luc Kroeze's writing about quality investing, highlights companies with solid past results, effective use of capital, and financial health. This method favors businesses that show steady increases in revenue and profit, good returns on money put into the business, acceptable debt, and the skill to turn accounting profits into real cash.

Financial Performance Measurements

ICF International's financial details show a number of traits that match quality investing ideas. The company shows notable ability in measures of profit and handling debt, which are important to the Caviar Cruise method's interest in lasting business activities.

Important measurements that pass the screening requirements are:

• Return on Invested Capital (leaving out cash, goodwill, and intangibles): 40.95%
• Debt to Free Cash Flow ratio: 3.97 years
• Five-year EBIT compound annual growth rate: 10.34%
• Five-year average profit quality: 183.54%

Return on Capital Effectiveness

The very high ROIC of 40.95% is much better than the screen's 15% minimum, showing very good effectiveness in using capital. This measurement is important for quality investors as it shows how well management uses shareholder money to create profits. Companies with high ROIC often have benefits over competitors that let them earn extra returns on their investments, building long-term value for shareholders. ICF's results here suggest the company has built a solid position in the market in the professional services field.

Debt Handling and Cash Flow

With a debt-to-free-cash-flow ratio of 3.97 years, ICF International easily meets the screen's need for under five years. This ratio shows how fast a company could pay back all its debt using its present free cash flow production. For quality investors, this points to financial health and lower risk in times of economic difficulty. The company's good free cash flow production offers options to pay for activities, seek strategic purchases, or give money back to shareholders without needing much outside funding.

Profit and Growth Path

The company's 10.34% five-year EBIT growth is better than the screen's 5% minimum, showing steady operational gains. EBIT growth is chosen over other profit measures in the Caviar Cruise method because it centers on main operational results, leaving out the impact of financial structure and tax situations. This allows for a more direct look at business effectiveness across different companies and fields. Also, ICF's profit quality ratio of 183.54% is much higher than the 75% minimum, showing the company changes accounting profits into real cash flow at a notable rate.

Fundamental Analysis Summary

As stated in Chartmill's fundamental analysis report, ICF International gets a total score of 5 out of 10, placing it as a medium-level performer in the professional services field. The company displays ability in valuation measurements, with price-to-earnings ratios lower than both field and S&P 500 averages. Profit margins have gotten better in the last few years, but growth possibilities seem restricted with predicted revenue decreases in future years. The complete fundamental analysis report gives more detailed views on these measurements and what they mean for investors.

Quality Investment Points

While the number-based screening finds several good qualities, quality investors usually think about other non-number-based points. ICF's business structure serving government and business clients in areas like management consulting, technology use, and policy advice offers some protection during downturns, though government spending patterns can cause changes. The company's international activities and varied services may offer steadiness, though investors should evaluate if management has shown the strategic thinking to keep benefits over competitors in a shifting professional services environment.

For investors wanting to find other similar quality investment chances, the Caviar Cruise screening methodology can be used to find other companies meeting these strict financial standards.

Disclaimer: This article provides factual information about ICF International Inc from available data and screening processes but is not investment advice. Investors should perform their own research and talk to financial experts before making investment choices.