ADT

ADT is the leading US home- and small-business-security provider, a business built on sticky, recurring monitoring subscriptions. The fundamentals are steadily improving: FY2025 revenue grew 4.7% to $5.13B, operating income rose 8.3% to $1.31B (a strong 25.5% operating margin), and net income jumped 18.9% to $596M — the continuation of a multi-year turnaround from a -$341M loss in FY2021 to consistent and growing profits. Return on equity is a healthy 15.8%.

The standout is cash generation: operating cash flow was $1.88B against just $176M of capex, reflecting the high-margin, subscription-funded model (note that reported D&A of $1.37B is heavy due to subscriber-acquisition accounting, which depresses GAAP EPS but not cash). Management is returning that cash aggressively — $607M of buybacks (up 152.2%) and $187M of dividends (up 2.5%). At $6.58 the stock trades at roughly 1.0x sales and a high-single-digit multiple of earnings, inexpensive for a recurring-revenue franchise growing earnings double-digits. (The data's diluted-EPS/P-E fields are tagged to a stale prior period and are not representative of FY2025, so they should be disregarded.)