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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 Weichai Power Co., Ltd. (HKG:2338), it is a financially-healthy , dividend-paying company with a a strong track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Weichai Power here.
Proven track record with adequate balance sheet and pays a dividend
In the previous year, 2338 has ramped up its bottom line by 24%, with its latest earnings level surpassing its average level over the last five years. Not only did 2338 outperformed its past performance, its growth also exceeded the Machinery industry expansion, which generated a 19% earnings growth. This paints a buoyant picture for the company. 2338 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that 2338 manages its cash and cost levels well, which is an important determinant of the company’s health. 2338 appears to have made good use of debt, producing operating cash levels of 0.79x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Income investors would also be happy to know that 2338 is a great dividend company, with a current yield standing at 4.0%. 2338 has also been regularly increasing its dividend payments to shareholders over the past decade.
Next Steps:
For Weichai Power, I've put together three key factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for 2338’s future growth? Take a look at our free research report of analyst consensus for 2338’s outlook.
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Valuation: What is 2338 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 2338 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 2338? 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.