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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Sandvik AB (STO:SAND) due to its excellent fundamentals in more than one area. SAND is a financially-sound , dividend-paying company with a a strong track record of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Sandvik here.
Excellent balance sheet with proven track record and pays a dividend
SAND delivered a satisfying double-digit returns of 23% in the most recent year Unsurprisingly, SAND surpassed the Machinery industry return of 21%, which gives us more confidence of the company’s capacity to drive earnings going forward. SAND’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that SAND has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. SAND seems to have put its debt to good use, generating operating cash levels of 0.49x 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.
For those seeking income streams from their portfolio, SAND is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 2.9%.
Next Steps:
For Sandvik, I’ve put together three key factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for SAND’s future growth? Take a look at our free research report of analyst consensus for SAND’s outlook.
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Valuation: What is SAND 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 SAND is currently mispriced by the market.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SAND? 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.