Toro Co. (NYSE:TTC) Emerges as a Quality Investment from Caviar Cruise Screen

The Caviar Cruise screening method is a systematic way to find good investment chances using measurable financial numbers. This plan, based on work by Belgian author Luc Kroeze, centers on firms showing steady revenue and profit improvement, high capital use effectiveness, acceptable debt amounts, and good earnings conversion to cash. By using these strict filters, investors can find businesses with lasting competitive edges and potential for long-term improvement.

TORO CO (NYSE:TTC) appears as a notable candidate from this screening process, fitting several important quality investing standards:

Notable Capital Effectiveness The firm shows a high return on invested capital, with a ROIC leaving out cash and goodwill of 26.42%, well above the 15% level needed for the Caviar Cruise screen. This number is important for quality investors because it shows management's skill in creating large returns from used capital, indicating operational skill and smart capital use choices.

Profit Improvement Surpassing Revenue Increase Toro shows notable EBIT improvement of 10.41% CAGR over five years, easily passing the 5% minimum need and clearly going beyond its revenue improvement of 1.08%. This difference points to better operational effectiveness and possible pricing strength, both signs of quality businesses. The capacity to improve profits quicker than sales shows scalable operations and successful cost control.

Good Cash Conversion and Financial Soundness With a five-year average profit quality of 87.06%, Toro shows very good conversion of accounting profits into real cash flow. The firm's debt-to-free-cash-flow number of 2.41 shows it could pay off all debt in under two-and-a-half years using present cash flow levels, much lower than the screen's 5-year highest limit. This financial discipline offers strength during economic declines and room for strategic investments.

According to the detailed fundamental analysis, Toro gets an overall score of 6 out of 10, with especially high marks in profitability (7/10) and dividend sustainability (7/10). The review notes the firm's better return numbers compared to industry rivals, steady profitability history, and dependable dividend improvement of almost 10% each year. While improvement outlooks seem average based on analyst forecasts, the firm's financial soundness stays firm with an Altman-Z score showing low bankruptcy chance.

The firm's global reach across 125 countries and varied product range covering professional and residential outdoor equipment offers natural spread. Its known brands like Toro, Ditch Witch, and Exmark build competitive edges through brand awareness and customer loyalty in the machinery field.

For investors wanting to review more quality investment chances found through the Caviar Cruise method, the full screening outcomes are ready through this stock screener link.

This review is given for information only and should not be seen as investment guidance. Readers should do their own research and talk with qualified financial experts before making investment choices. Past results do not ensure future outcomes, and all investments carry inherent risks.