UNITED STATES LIME & MINERALS (NASDAQ:USLM) – A Caviar Cruise Quality Stock with High ROIC and Debt-Free Strength

The Caviar Cruise stock screening strategy is built to find top-tier companies ideal for long-term investment, focusing on steady profitability, smart capital use, and financial strength. Based on quality investing ideas, the screen looks for firms with reliable revenue and EBIT growth, high returns on invested capital (ROIC), low debt, and solid cash flow conversion. These measures help investors spot businesses with lasting competitive edges, pricing strength, and the potential to grow value over time.

A notable example under this approach is UNITED STATES LIME & MINERALS (NASDAQ:USLM). The company produces lime and limestone products for industries like construction and environmental services. Its financial performance matches the Caviar Cruise standards, making it a strong choice for investors focused on quality.

Key Quality Metrics for USLM

1. High Return on Invested Capital (ROIC)

• ROICexgc (excluding cash, goodwill, and intangibles): 42.82%
  A strong ROIC shows effective capital use, a sign of a well-run business. USLM’s ROIC is well above the Caviar Cruise target of 15%, proving its skill in turning reinvested capital into profits. This measure is important as it reveals how well management directs resources to profitable projects.

2. Consistent and Rising Profitability

• EBIT Growth (5Y CAGR): 32.86%
  The company’s operating profit growth far exceeds the screen’s 5% minimum, pointing to improving margins and operational efficiency. Growing EBIT suggests pricing strength and scale advantages—key for long-term value growth.
• Profit Quality (5Y Avg.): 93.5%
  This shows how well net income turns into free cash flow. USLM’s near-perfect score means earnings are reliable and cash generation is strong, supporting sustainability.

3. No Debt on the Balance Sheet

• Debt/FCF: 0.0
  USLM has no debt, a rare advantage that removes interest costs and boosts financial flexibility. The Caviar Cruise screen prefers companies with Debt/FCF under 5, but USLM’s clean balance sheet puts it in a top-tier group.

4. Financial Strength and Valuation
The fundamental analysis report gives USLM an 8/10, noting:

• Profitability (9/10): Leading margins (Gross Margin: 47.3%, Operating Margin: 41.2%) and ROE (22.64%).
• Financial Health (9/10): No debt, a current ratio of 15.29, and a high Altman-Z score (38.57) indicate low bankruptcy risk.
• Growth (7/10): Revenue and EPS have grown at 14.95% and 32.47% yearly over five years, with analysts expecting continued double-digit growth.
• Valuation (5/10): While the P/E of 25.85 is above the industry average, it’s reasonable given USLM’s superior profitability and growth potential.

Why These Metrics Matter for Quality Investors

The Caviar Cruise strategy targets businesses that can grow earnings sustainably without heavy debt—a profile USLM fits. Its high ROIC and cash conversion support reinvestment or shareholder returns, while its debt-free position lowers risk in economic downturns. The company’s diverse end markets (construction, environmental, energy) also protect it from sector-specific swings.

Next Steps

For investors looking for similar high-quality stocks, the Caviar Cruise screen provides a selected list of strong candidates.

Disclaimer: This article is not investment advice. Do your own research or consult a financial advisor before making investment decisions.