Enpro currently trades at $222.87 and has been a dream stock for shareholders. It’s returned 279% since August 2020, more than tripling the S&P 500’s 90% gain. The company has also beaten the index over the past six months as its stock price is up 14.1%.

Is there a buying opportunity in Enpro, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Is Enpro Not Exciting?

We’re happy investors have made money, but we don't have much confidence in Enpro. Here are three reasons why NPO doesn't excite us and a stock we'd rather own.

1. Long-Term Revenue Growth Flatter Than a Pancake

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. Unfortunately, Enpro struggled to consistently increase demand as its $1.08 billion of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and is a sign of lacking business quality.

2. EPS Growth Has Stalled Over the Last Two Years

While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.

Enpro’s flat EPS over the last two years was weak. On the bright side, this performance was better than its 1.4% annualized revenue declines.

3. Previous Growth Initiatives Haven’t Impressed

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Enpro historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 6.4%, somewhat low compared to the best industrials companies that consistently pump out 20%+.

Final Judgment

Enpro isn’t a terrible business, but it doesn’t pass our quality test. With its shares beating the market recently, the stock trades at 28.3× forward P/E (or $222.87 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. Let us point you toward an all-weather company that owns household favorite Taco Bell.

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