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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Greaves Cotton Limited (NSE:GREAVESCOT) due to its excellent fundamentals in more than one area. GREAVESCOT is a financially-sound , dividend-paying company with a a great history of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Greaves Cotton here.
Flawless balance sheet established dividend payer
GREAVESCOT delivered a satisfying double-digit returns of 21% in the most recent year Unsurprisingly, GREAVESCOT surpassed the Machinery industry return of 12%, which gives us more confidence of the company’s capacity to drive earnings going forward. GREAVESCOT’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that GREAVESCOT manages its cash and cost levels well, which is an important determinant of the company’s health. GREAVESCOT currently has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
GREAVESCOT’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 4.5%.
Next Steps:
For Greaves Cotton, I’ve compiled three essential factors you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for GREAVESCOT’s future growth? Take a look at our free research report of analyst consensus for GREAVESCOT’s outlook.
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Valuation: What is GREAVESCOT 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 GREAVESCOT 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 GREAVESCOT? 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.