3 Big Reasons to Love Curtiss-Wright (CW)

via StockStory
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CW Cover Image

What a brutal six months it’s been for Curtiss-Wright. The stock has dropped 20.2% and now trades at $568.59, rattling many shareholders. This may have investors wondering how to approach the situation.

Following the drawdown, is this a buying opportunity for CW? Find out in our full research report, it’s free.

Why Are We Positive on Curtiss-Wright?

Formed from a merger of 12 companies, Curtiss-Wright (NYSE:CW) provides a range of products and services to the aerospace, industrial, electronic, and maritime industries.

1. Long-Term Revenue Growth Shows Momentum

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Curtiss-Wright’s 8.9% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

Curtiss-Wright Quarterly Revenue

2. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Curtiss-Wright’s EPS grew at 14.5% compounded annual growth rate over the last five years, higher than its 8.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Curtiss-Wright Trailing 12-Month EPS (Non-GAAP)

3. Increasing Free Cash Flow Margin Juices Financials

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

As you can see below, Curtiss-Wright’s margin expanded by 9 percentage points over the last five years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Curtiss-Wright’s free cash flow margin for the trailing 12 months was 17.3%.

Curtiss-Wright Trailing 12-Month Free Cash Flow Margin

Final Judgment

These are just a few reasons why we think Curtiss-Wright is a high-quality business. With the recent decline, the stock trades at 35× forward P/E (or $568.59 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it’s free.

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