Victory Capital Holdings Inc. (NASDAQ:VCTR) Identified as a High-Quality Stock by Caviar Cruise Screen

Victory Capital Holdings Inc. (NASDAQ:VCTR) has been identified by the Caviar Cruise stock screening method, a strategy based on quality investing principles. This method focuses on finding companies with good past results, solid profitability, efficient use of capital, and lasting financial strength, characteristics that match long-term, buy-and-hold investment ideas. The screen assesses measures like revenue and EBIT growth, return on invested capital, debt level, and profit quality to find businesses that show operational strength and the ability to withstand challenges.

Performance and Growth Metrics

Victory Capital shows notable growth and profitability measures that fit the Caviar Cruise requirements:

• EBIT Growth (5Y CAGR): 14.63% – Beating the screen’s 5% minimum, this shows good operational increase and capable management of main business operations.
• Return on Invested Capital (Excluding Cash/Goodwill/Intangibles): 340.99% – Greatly above the 15% minimum, this shows outstanding effectiveness in creating returns from invested capital, a key part of quality investing.
• Debt-to-Free Cash Flow: 3.67 – Much lower than the screen’s highest allowed level of 5, this points to a acceptable debt level compared to cash creation, lowering financial risk.
• Profit Quality (5Y Average): 126.85% – Higher than the 75% requirement, this indicates that earnings are regularly turned into cash, highlighting financial dependability.

These measures together confirm Victory Capital’s capacity to grow profitably, use capital well, and keep a strong balance sheet, traits that are highly regarded by quality investors looking for lasting compounding companies.

Fundamental Health and Valuation

An examination of Victory Capital’s fundamental analysis report supports its fit with quality investing beliefs. The report gives a good rating of 7/10, noting positive points in profitability, growth, and valuation, along with acceptable financial health. Important points include:

• Profitability: High margins (Operating Margin of 46.16%, Profit Margin of 25.95%) and better returns on equity and assets compared to others in the industry.
• Growth: Good historical and expected growth in revenue and earnings per share, with analysts predicting faster increase.
• Valuation: Appealing multiples when measured against both industry norms and the wider market, indicating possible underappreciation even with high quality.
• Dividend: A maintainable yield with a record of growth, aiding income-focused plans without reducing reinvestment ability.

While the report mentions small issues in solvency measures, like a medium Altman-Z score, the general picture shows a capably run company with strong points in the asset management field.

Strategic Fit for Quality Portfolios

Victory Capital’s profile matches the qualitative features stressed in Caviar Cruise screening, like business model simplicity, ability to grow, and control over pricing. As a dedicated asset manager with varied strategies and an increasing client list, it gains from long-term movements in wealth management and retirement planning. Its capital-light structure, along with high cash conversion, enables planned reinvestment, dividends, and share repurchases, improving shareholder returns over time.

For investors wanting to review other companies that satisfy comparable strict requirements, the Caviar Cruise screener provides a useful tool to find high-quality investment options.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research or consult a financial advisor before making investment decisions.