In This Article:
Star Cement Limited (NSE:STARCEMENT) 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 STARCEMENT, it is a financially-robust company with a strong track record and a excellent future outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Star Cement here.
Flawless balance sheet and undervalued
Investors in search for stocks with room to flourish should look no further than STARCEMENT, with its expected earinngs growth of 24%, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to ramp up by 71% next year. This indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. STARCEMENT has a strong track record of performance. In the previous year, STARCEMENT delivered an impressive double-digit return of 20% Not surprisingly, STARCEMENT outperformed its industry which returned 8.0%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward.
STARCEMENT’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 a crucial insight into the health of the company. STARCEMENT’s has produced operating cash levels of 4.78x total debt over the past year, which implies that STARCEMENT’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
Next Steps:
For Star Cement, there are three fundamental aspects you should further examine:
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Valuation: What is STARCEMENT 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 STARCEMENT is currently mispriced by the market.
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Dividend Income vs Capital Gains: Does STARCEMENT 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 STARCEMENT as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of STARCEMENT? 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.