In This Article:
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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 RM plc (LON:RM.), it is a financially-robust , dividend-paying company with a a great 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 RM here.
Solid track record with adequate balance sheet and pays a dividend
Over the past year, RM. has grown its earnings by 32%, with its most recent figure exceeding its annual average over the past five years. This strong performance generated a robust double-digit return on equity of 31%, which is what investors like to see! With a debt-to-equity ratio of 15%, RM.’s debt level is acceptable. This implies that RM. has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt. RM. appears to have made good use of debt, producing operating cash levels of 1.95x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For those seeking income streams from their portfolio, RM. is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 3.1%.
Next Steps:
For RM, there are three pertinent factors you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for RM.’s future growth? Take a look at our free research report of analyst consensus for RM.’s outlook.
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Valuation: What is RM. 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 RM. 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 RM.? 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.