In This Article:
Attractive stocks have exceptional fundamentals. In the case of HEG Limited (NSE:HEG), there’s is a financially-robust company with an impressive track record and a buoyant future outlook. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on HEG here.
Flawless balance sheet with high growth potential and pays a dividend
HEG is an attractive stock for growth-seeking investors, with an expected earnings growth of 21% in the upcoming year. The optimistic bottom-line growth is supported by a similarly outstanding revenue growth over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. HEG delivered a satisfying double-digit returns of 58% in the most recent year Unsurprisingly, HEG surpassed the Electrical industry return of 11%, which gives us more confidence of the company’s capacity to drive earnings going forward.
HEG’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. HEG appears to have made good use of debt, producing operating cash levels of 1.97x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For HEG, there are three important aspects you should further examine:
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Valuation: What is HEG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HEG is currently mispriced by the market.
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Dividend Income vs Capital Gains: Does HEG return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from HEG as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HEG? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.