LENNAR CORP-A (NYSE:LEN) – A Strong Candidate for GARP Investors

LENNAR CORP-A (NYSE:LEN) stands out as a compelling pick for investors seeking growth at a reasonable price (GARP). The company, a leading homebuilder and provider of real estate financial services, meets key criteria from Peter Lynch’s investment strategy, balancing solid growth with sound financial health and an attractive valuation.

Why LEN Fits the GARP Approach

• Sustainable Growth: LEN has delivered a 5-year average EPS growth of 20.01%, comfortably within Lynch’s preferred range of 15-30%. This indicates steady, manageable expansion rather than overheated growth.
• Reasonable Valuation: With a PEG ratio of 0.38 (well below Lynch’s threshold of 1), the stock is priced attractively relative to its earnings growth. The P/E ratio of 7.67 further supports its undervaluation compared to industry peers.
• Strong Financial Health: The company maintains a low debt-to-equity ratio of 0.16, far below Lynch’s upper limit of 0.6, reflecting a conservative capital structure. Its current ratio of 8.37 highlights ample liquidity to cover short-term obligations.
• High Profitability: LEN’s return on equity (ROE) of 16.26% exceeds Lynch’s 15% benchmark, demonstrating efficient use of shareholder capital.

Fundamental Snapshot

Our fundamental analysis assigns LEN a rating of 7/10, citing excellent profitability and financial health. Key strengths include:

• Consistent profitability and positive cash flow over the past five years.
• Industry-leading margins, with an operating margin outperforming 79.69% of peers.
• A reliable dividend history, though the yield of 1.89% is modest.

For a deeper dive, review the full fundamental report here.

Our Peter Lynch Strategy screener lists more stocks matching these criteria, updated daily.

Disclaimer

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