Woodward Stock Discussion

The market seems less excited about Woodward despite its EPS growth, which could present an investment opportunity. The company's recent performance is better than its annualized return of 10% over half a decade, indicating strong share price momentum.

The company's announcements reflect its strong balance sheet, ability to generate cash flow, and a balanced capital allocation strategy, which includes returning cash to shareholders through dividends and stock repurchases, according to Chip Blankenship, Chairman and CEO of Woodward, Inc.

With strong forecast growth, Woodward's high P/E ratio appears justified. Shareholders await a stable medium-term growth rate to maintain this high P/E ratio, expecting the virtuous cycle to remain intact, barring adverse conditions.

These unusual expenses are one-off and their absence in the future forecasts a higher profit for Woodward next year. It can be argued that Woodward's statutory profit understates its earning potential.

Woodward's optimistic future growth and relative affordability may interest investors. Its undervaluation coupled with high growth potential could make it appealing for existing shareholders and potential investors. However, management and financial health should be assessed before investing.

Despite the lower EPS growth, the market perceives Woodward more favorably now than it did 5 years ago due to a consistent track record of earnings growth and the influence of dividends paid in the total shareholder return.

Our Call
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