Roper Industries Inc.ROP

Morningstar Rating

Stock Research and Analysis

by Daniel Holland

Roper Industries specializes in making customers more productive through improved technology and has used its unique position to generate strong free cash flows and returns on invested capital. The firm's heavy acquisition spree during the last six Read more

Bulls Say

The acquisition of CBORD in February 2008 gives the firm a solid footing in the integrated security system market and should bolster its customer base on college campuses and hospitals.

The firm has used its strong free cash flows to grow internally as opposed to constantly tapping the capital markets.

After years of having junk-rated debt, Roper now has achieved its long-term goal of reaching investment-grade status.

With more than 80% of revenues recurring in nature and a 95% customer-retention rate, Roper avoids having to constantly fight for new customers. Read more

Bears Say

As a result of being highly acquisitive, the firm's intangible assets are more than 70% of the balance sheet leading to a negative tangible book value.

Impressive margins across its businesses are likely to attract competitors, chipping away at the profitable base in place.

Roper's business model is contingent on acquisitions. Without those acquisitions, the firm's invested capital base will likely shrink. Read more

Strategy

Roper seeks to grow by acquiring firms that operate in niche markets that are not highly cyclical. Its products provide value to customers by enhancing productivity such as the recent acquisition of Read more

Management

Brian Jellison holds the office of chairman and CEO of Roper. The board consists of eight members and holds staggered elections annually for the board members. Management has overseen an impressive record of growth, which has steadily improved operating Read more

Profile

Roper Industries is a diversified manufacturer serving niche markets. It sells remote water meter reading devices, testing equipment, control systems, and radio frequency Read more

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