RBC BEARINGS INC (NYSE:RBC) has been identified as a potential quality investment candidate through our Caviar Cruise stock screener. The company, which specializes in precision bearings and components for aerospace, defense, and industrial markets, demonstrates several characteristics that align with quality investing principles.
Key Strengths
- High Return on Invested Capital (ROIC) – RBC’s ROIC (excluding cash and goodwill) stands at 26.01%, well above the 15% threshold for quality stocks. This indicates efficient use of capital to generate profits.
- Strong EBIT Growth – The company has delivered a 5-year EBIT growth rate of 18.70%, reflecting improving operational profitability.
- Healthy Debt Management – RBC’s debt-to-free cash flow ratio is 3.80, meaning it could repay its debt in under four years using current cash flows—a sign of financial stability.
- Exceptional Profit Quality – With a 5-year average profit quality of 173.26%, RBC converts net income into free cash flow at an impressive rate, suggesting reliable earnings.
Fundamental Analysis Summary
RBC’s financial health is solid, with strong liquidity (current ratio of 3.26) and manageable leverage (debt-to-equity of 0.30). Profitability metrics are robust, including an operating margin of 22.69%, outperforming 93.75% of industry peers. However, valuation remains a concern—the stock trades at a P/E of 36.05, above both the industry and S&P 500 averages.
Growth Outlook
Analysts expect 11.88% annual EPS growth and 7.73% revenue growth in the coming years, supported by RBC’s position in aerospace and industrial markets.
Our Caviar Cruise screener lists more quality stocks meeting these criteria. For a deeper dive, review the full RBC fundamental report.
Disclaimer
This is not investing advice! Always conduct your own research before making investment decisions.
