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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Playmates Holdings Limited (HKG:635), it is a financially-healthy company with an impressive track record superior dividend payments, trading at a great value. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, take a look at the report on Playmates Holdings here.
Undervalued with excellent balance sheet and pays a dividend
635'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 indicates that 635 has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. 635 seems to have put its debt to good use, generating operating cash levels of 0.4x 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. 635's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 635's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, 635's share price is trading below the group's average. This bolsters the proposition that 635's price is currently discounted.
635’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 14%.
Next Steps:
For Playmates Holdings, there are three key factors you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for 635’s future growth? Take a look at our free research report of analyst consensus for 635’s outlook.
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Historical Performance: What has 635'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 635? 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.