Why KADANT INC (NYSE:KAI) qualifies as a quality stock.

In this article we will dive into KADANT INC (NYSE:KAI) as a possible candidate for quality investing. Investors should always do their own research, but we noticed KADANT INC showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Looking into the quality metrics of KADANT INC

• KADANT INC has achieved substantial revenue growth over the past 5 years, with a 8.61% increase. This signifies the company's ability to successfully capture market opportunities and generate sustained revenue growth.
• With a robust ROIC excluding cash and goodwill at 31.79%, KADANT INC showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
• KADANT INC demonstrates a well-balanced Debt/Free Cash Flow Ratio of 2.38, indicating effective debt management and strong cash flow generation. This ratio suggests the company has a sustainable financial position and the capacity to allocate capital efficiently.
• With a robust Profit Quality (5-year) ratio of 135.0%, KADANT INC highlights its ability to consistently generate high-quality profits. This metric reflects the company's effective management and operational excellence in delivering reliable earnings over the long term.
• KADANT INC has experienced impressive EBIT growth over the past 5 years, with 12.89% increase. This reflects the company's effective operational performance and highlights its potential for long-term financial success.
• With EBIT 5-year growth outpacing its Revenue 5-year growth, KADANT INC showcases its effective cost management and enhanced operational performance. This suggests the company's ability to generate higher earnings from its revenue streams.

What else is there to say on the fundamentals of NYSE:KAI?

At ChartMill, a crucial aspect of their analysis is the assignment of a Fundamental Rating to each stock. This rating, ranging from 0 to 10, is calculated daily by considering numerous fundamental indicators and properties.

We assign a fundamental rating of 5 out of 10 to KAI. KAI was compared to 132 industry peers in the Machinery industry. KAI scores excellent points on both the profitability and health parts. This is a solid base for a good stock. While showing a medium growth rate, KAI is valued expensive at the moment.

For an up to date full fundamental analysis you can check the fundamental report of KAI

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.