JANUS INTERNATIONAL GROUP INC (NYSE:JBI) – A Quality Stock with Strong Fundamentals

JANUS INTERNATIONAL GROUP INC (NYSE:JBI) was identified by our Caviar Cruise screener as a potential candidate for quality investors. The company, which specializes in self-storage and industrial building solutions, meets several key criteria for long-term investment consideration. Below, we examine why JBI stands out.

Key Strengths

• High Return on Invested Capital (ROIC): JBI’s ROIC (excluding cash and goodwill) stands at 38.2%, well above the 15% threshold for quality stocks. This indicates efficient capital allocation and strong profitability.
• Healthy Debt Management: The company’s debt-to-free cash flow ratio is 3.64, meaning it could repay its debt in under four years using current cash flows—a sign of financial stability.
• Strong Profit Quality: Over the past five years, JBI has converted 140% of its net income into free cash flow, far exceeding the 75% benchmark. This suggests reliable earnings and effective cash generation.
• EBIT Growth Outpacing Revenue: With a 5-year EBIT growth rate of 12.8%, JBI demonstrates improving operational efficiency, a hallmark of well-managed businesses.

Fundamental Analysis Summary

JBI’s fundamentals present a mixed but promising picture. While its profitability metrics (ROA, ROE) are in line with industry averages, its gross margin of 40.15% outperforms 73% of peers. Liquidity is strong, with a current ratio of 2.59 and quick ratio of 2.21, indicating no short-term solvency concerns.

Valuation appears reasonable, with a forward P/E of 12.43, below both industry and S&P 500 averages. Analysts expect EPS growth of 13.06% annually, suggesting potential upside.

Considerations

• Revenue Decline: Recent yearly revenue dropped by 13.96%, though long-term growth remains positive at 11.26%. Investors should monitor whether this is a temporary setback.
• Debt Levels: The debt-to-equity ratio of 1.03 is higher than 80% of peers, warranting caution for risk-averse investors.

For more quality stock ideas, explore our Caviar Cruise screener.
For a deeper dive, review the full JBI fundamental report.

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.