In This Article:
Firstsource Solutions Limited (NSE:FSL) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of FSL, it is a financially-sound company with a strong track record superior dividend payments, trading at a great value. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Firstsource Solutions here.
Excellent balance sheet, good value and pays a dividend
With a debt-to-equity ratio of 21%, FSL’s debt level is acceptable. This implies that FSL has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt. FSL seems to have put its debt to good use, generating operating cash levels of 0.68x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. FSL is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if FSL's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the software industry, FSL is also trading below its peers, relative to earnings generated. This supports the theory that FSL is potentially underpriced.
FSL's high dividend payments make it one of the best dividend stocks on the market, and its profitability ensures that dividends are well-covered by its net income.
Next Steps:
For Firstsource Solutions, I've compiled three fundamental aspects you should further research:
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Future Outlook: What are well-informed industry analysts predicting for FSL’s future growth? Take a look at our free research report of analyst consensus for FSL’s outlook.
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Historical Performance: What has FSL's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FSL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.