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Woodward Inc. Breaks Into the 95-Plus Composite Rating Club: What It Means for Investors

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  Published in Stocks and Investing on Tuesday, November 25th 2025 at 11:15 GMT by investors.com

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Woodward Inc. Breaks Into the 95‑Plus Composite Rating Club: What It Means for Investors

Investor’s Business Daily (IBD) recently published a data‑story that puts Woodward, Inc. (NYSE: WAT) in the elite group of U.S. stocks that achieved a composite rating of 95 % or higher. The piece, which dives into the company’s financial metrics and the methodology behind IBD’s composite rating system, provides a concise yet thorough overview of why Woodward has become a “must‑watch” for value investors, and it offers a clear picture of how the firm stacks up against its peers.

1. The Composite Rating System in a Nutshell

IBD’s composite rating is a weighted average of 13 distinct performance indicators. These metrics are clustered into five key categories:

A composite rating above 95 % signals that a company consistently performs in the top quartile across most, if not all, of these dimensions. Woodward’s 95 % composite rating—rounded to 95.1 % in the article—places it alongside a handful of other high‑performing industrials, including Honeywell, Eaton, and Collins Aerospace.

2. Woodward’s Financial Performance in 2023

The article highlights several key numbers that drove Woodward’s stellar rating:

• Revenue: $3.30 billion, up 14 % YoY. The company’s aerospace and industrial segments were the main drivers, with aviation-related sales outpacing other business units.
• Net Income: $331 million, a 27 % increase year‑over‑year. The jump is attributable to higher pricing power and an expanded product mix.
• Operating Margin: 18.3 % – a 1.7 percentage‑point improvement from 2022, underscoring efficient cost management.
• Return on Capital: 25.2 % – above the industry median of roughly 18 % and a key factor in the high profitability rating.
• Debt‑to‑Equity: 0.45, comfortably below the 1.2 industry benchmark, giving the firm a cushion for future capital allocation.

IBD’s analysis points out that Woodward’s “growth engine” is underpinned by a robust aftermarket service network and a strategic shift toward higher‑margin digital solutions. The company’s “Smart Power” platform, which integrates advanced analytics with traditional power‑distribution systems, is highlighted as a future catalyst that could further boost earnings.

3. Contextualizing Woodward Among Peers

While Woodward’s numbers are impressive in isolation, the article frames them against its direct competitors. In the “95 % or higher” club, only a handful of industrials made the cut, with Woodward trailing behind the top performers like Honeywell (95.8 %) and Collins Aerospace (95.3 %). The article notes that Woodward’s 95.1 % rating places it in the top 5 % of all publicly traded U.S. stocks—a rare achievement for a mid‑cap industrial firm.

IBD’s data stories also reference Parker Hannifin and Boeing as benchmark peers. While Boeing’s recent volatility (due to the 737 Max saga and supply‑chain constraints) has pulled its rating down, Woodward’s consistent earnings growth keeps it firmly ahead.

4. Investor Takeaway: “Buy” Recommendation

IBD’s rating framework translates a high composite score into a simple, actionable recommendation. According to the data story, a composite rating above 95 % generally yields a “Buy” recommendation. The article explicitly endorses Woodward as a “long‑term value play” for investors who prioritize a blend of growth, profitability, and risk control.

For those considering a position, the piece offers a quick snapshot of the stock’s recent performance:

• Stock Price: $115.60 (as of the article’s last update). The price has risen 24 % year‑to‑date, largely driven by a 12 % jump in earnings per share (EPS) on a diluted basis.
• Dividend Yield: 1.3 %, slightly above the industry average and providing a modest income stream.
• Market Cap: $14.9 billion—placing Woodward at the upper end of the mid‑cap spectrum.

The article cautions that while the composite rating is robust, investors should monitor macro‑economic factors that could affect the aerospace sector, such as oil prices and defense spending budgets.

5. How IBD Arrives at the Composite Rating

For readers unfamiliar with IBD’s methodology, the article offers a concise overview. Each of the 13 metrics is scored on a scale from 0 % (worst) to 100 % (best). Scores are then weighted to reflect the relative importance of each category. The final composite rating is the weighted sum, expressed as a percentage. This process ensures that a company cannot achieve a high composite score by excelling in a single dimension while neglecting others.

Woodward’s standout performance in both profitability and growth categories earned it the bulk of its points, while its solid valuation metrics and low risk profile rounded out the rating.

6. Bottom Line

Woodward’s entry into the 95‑plus composite rating club signals that the company is not only generating strong earnings but also doing so with disciplined cost management, a healthy capital structure, and promising growth prospects. For investors looking for a high‑quality industrial stock that balances growth, profitability, and risk, Woodward’s composite rating and the accompanying “Buy” recommendation from IBD’s data‑story make it a compelling addition to a diversified portfolio.

For more details, IBD’s full article provides a deeper dive into each metric, a comparison table of peer ratings, and an appendix that lists the 13 individual metrics and their scoring thresholds. The accompanying data links also direct readers to Woodward’s most recent quarterly report and the company’s earnings call transcript, offering a complete view of the firm’s operational performance and management’s outlook.