UFP Technologies Inc (NASDAQ:UFPT) Identified as a Quality Investment with Strong Growth and High Returns

UFP Technologies Inc (NASDAQ:UFPT) has been identified by an investment screening method that looks for good companies with lasting competitive benefits and solid financial traits. The Caviar Cruise screen, based on quality investing ideas, finds businesses with steady revenue and profit increases, high returns on capital put to use, acceptable debt, and the skill to turn accounting profits into actual cash. This method favors companies with business models that can create lasting worth.

Financial Performance and Growth Measures

The company displays very good operational performance in several important areas that quality investors look for. UFP Technologies shows notable EBIT growth of 27.59% CAGR over the last five years, well above the screen's 5% minimum. This large profit increase points to good operational effectiveness and pricing ability. The company's capacity to increase earnings at this rate implies it gains from scale benefits and competitive strengths in its specific markets.

• EBIT Growth (5Y CAGR): 27.59% compared to a minimum of 5%
• Profit Quality (5Y Average): 76.97% compared to a level of 75%
• Debt to Free Cash Flow: 2.26 years compared to a maximum of 5 years

Return on Invested Capital and Effectiveness

UFP Technologies performs very well in capital use effectiveness, a key part of quality investing. The company reaches a notable ROIC excluding cash, goodwill, and intangibles of 36.71%, more than twice the screen's 15% need. This very good return shows the company's ability to create substantial profits from its operational assets and indicates good management performance and competitive standing within the medical device components and packaging field.

Financial Health and Steadiness

The company keeps a careful financial structure that matches quality investing ideas. With a debt-to-free cash flow ratio of 2.26 years, UFP Technologies could repay all debt in under two and a half years using current cash flow levels. This solid solvency position offers financial room and lowers risk during economic declines or industry difficulties.

Fundamental Analysis Summary

According to the detailed fundamental analysis report, UFP Technologies gets an overall rating of 6 out of 10, with especially high marks in profitability (8/10) and growth (8/10). The analysis points out the company's very good return measures, with ROA of 10.57% doing better than 93.65% of similar companies and ROE of 17.41% higher than 91.01% of others. While valuation seems fair next to industry standards, the report mentions some small worries about financial health, mainly connected to share dilution and higher debt levels compared to the past.

Quality Investment Points

Beyond the numbers, UFP Technologies works in medical markets with long-term growth patterns fueled by population changes and technology progress. The company's focus on custom manufacturing for medical devices and packaging creates obstacles for new entrants through technical knowledge and regulatory needs. Their place in minimally invasive surgery, infection prevention, and orthopedic uses matches lasting healthcare patterns that usually show stability during recessions.

For investors wanting to find more companies that fit these quality investing standards, the Caviar Cruise screening results give other investment options that share these traits of solid financial performance, high capital effectiveness, and lasting business models.

Disclaimer: This article provides factual information and analysis but is not investment advice. Investors should perform their own research and think about their personal financial situation before making investment choices.