In This Article:
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 APL Apollo Tubes Limited (NSE:APLAPOLLO), it is a financially-sound company with an impressive track record and an optimistic 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, read the full report on APL Apollo Tubes here.
High growth potential with proven track record and pays a dividend
APLAPOLLO’s cash-generating ability is outstanding, with analysts expecting its operating cash flows to more than double in the upcoming year. This underlies the notable 24.0% return on equity over the next few years leading up to 2021. APLAPOLLO delivered a satisfying double-digit returns of 20.1% in the most recent year Not surprisingly, APLAPOLLO outperformed its industry which returned 11.6%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward.
APLAPOLLO’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 an important determinant of the company’s health. Debt funding requires timely payments on interest to lenders. APLAPOLLO’s earnings sufficiently covered its interest in the prior year, which indicates there’s low risk associated with the company not being able to meet these key expenses.
Next Steps:
For APL Apollo Tubes, I’ve put together three key factors you should further research:
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Valuation: What is APLAPOLLO 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 APLAPOLLO is currently mispriced by the market.
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Dividend Income vs Capital Gains: Does APLAPOLLO 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 APLAPOLLO as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of APLAPOLLO? 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.