Could Cash Machine Roper Technologies Stock Be Your Next Buy?

Roper Technologies (ROP) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With ROP

ROP stock is currently trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also below its 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Roper’s 2025 full-year revenue increased 12%, with enterprise software bookings growing in the low double digits. Acquisitions like CentralReach and Subsplash add significant future revenue in growing vertical markets. Over two-thirds of revenue comes from recurring sources. Management projects 8% total revenue growth for 2026, with 5-6% organic growth, expecting stronger organic performance in the latter half, despite conservative assumptions for certain markets.

ROP Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 6.0%, but Roper Technologies stock does
• Strong Margin: Last 12 month operating margin of 28.1%
• Growth: Last 12 revenue growth of 14.0% – low growth, but this selection is all about high yield and margin
• Valuation: ROP stock currently trading at 37% below 2Y high, 16% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of ROP fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While ROP stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. ROP slipped 34% in the Dot-Com crash, 50% during the Global Financial Crisis, and 35% around the Covid pandemic. The 2018 correction and recent inflation shock also pushed it down 20% and 27%, respectively. It’s a solid company, but these dips show risk is still real when markets turn sour. Even strong fundamentals don’t always shield you from sharp drawdowns. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read ROP Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell ROP Stock.

Stocks Like ROP

Not ready to act on ROP? Consider these alternatives:

1. Qualcomm (QCOM)
2. Adobe (ADBE)
3. Fidelity National Information Services (FIS)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Why Stock Pickers Win More With Multi Asset Portfolios

Individual picks are volatile but diversified assets offset each other. A multi asset portfolio helps you stay the course capture upside and reduce downside.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices