How does TOLL BROTHERS INC (NYSE:TOL) stack up against Peter Lynch’s investment principles?

With a strategy that emphasized steady earnings growth and a strong market position, Peter Lynch sought out long-term winners. We put TOLL BROTHERS INC (NYSE:TOL) to the test against his stock-picking rules.

Why Peter Lynch may take an interest in TOLL BROTHERS INC (NYSE:TOL)

• TOL exhibits a strong Return on Equity (ROE) of 19.36%, indicating the company's ability to generate solid returns on shareholder investments. This metric reflects the company's efficient utilization of equity capital and its profitability.
• With a Debt/Equity ratio of 0.35, TOL demonstrates prudent financial management.
• The 5-year EPS growth of TOL (27.96) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• With a PEG ratio of 0.25, TOL is valued very reasonably for the growth it experiences.
• A Current Ratio of 3.83 indicates that TOL has a comfortable liquidity buffer.

What is the full fundamental picture of TOL telling us.

ChartMill employs a sophisticated system to assign a Fundamental Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple fundamental indicators and properties.

Taking everything into account, TOL scores 6 out of 10 in our fundamental rating. TOL was compared to 64 industry peers in the Household Durables industry. TOL scores excellent on profitability, but there are some minor concerns on its financial health. TOL may be a bit undervalued, certainly considering the very reasonable score on growth These ratings could make TOL a good candidate for value investing.

Check the latest full fundamental report of TOL for a complete fundamental analysis.

Our Peter Lynch screener lists more Affordable Growth stocks and is updated daily.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.