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What Is Roper Technologies All About?



Overview of Roper Technologies

Roper Technologies (ROP) conducts its operations through four business segments based on product type. These segments are Medical and Scientific Imaging, RF Technology, Industrial (XLI) technology, and Energy Systems and Controls. ROP’s four segments emphasize research and development to improve product quality, performance, and the development of new technologies.

Roper’s four segments serve a broad customer base in a variety of diverse niche markets. The organic growths of ROP’s segments are key to its long term cash flow. Nearly 50% or more of its revenue is recurring in nature.

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Being asset light helped Roper Technologies

Roper Technologies’ focus is on linear growth and better returns on investments. Asset-light models can deliver better returns on assets, lower profit volatility, greater flexibility, and better scalability than asset-heavy models.

ROP’s capital expenditures for 2013, 2014, and 2015 were $42.5 million, $37.6 million, and $36.3 million, respectively. ROP’s capital expenditure-to-net sales ratios stood at 1.3%, 1.1%, and 1.0% in 2013, 2014, and 2015, respectively.

The company’s capital expenditure fell at a CAGR (compound annual growth rate) of 7.7% from 2013 to 2015. Its operating profit, operating cash flow, and free cash flow rose at CAGRs of 10.4%, 7.6%, and 8.4%, respectively, in the same period.

Roper Technologies’ peers General Electric (GE), Honeywell Industries (HON), and 3M Company (MMM) have capital expenditure-to-sales ratios of 6.3%, 2.7%, and 4.8%, respectively.

Let’s analyze Roper Technologies’ key acquisitions in the next article.


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