RXP Services Limited (ASX:RXP) 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 RXP, it is a financially-robust company with a a great history high-quality dividend payments, trading at a great value. 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 RXP Services here.
Very undervalued with excellent balance sheet and pays a dividend
RXP’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 key determinant of the company’s health. RXP seems to have put its debt to good use, generating operating cash levels of 0.72x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. RXP’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, RXP’s share price is trading below the group’s average. This bolsters the proposition that RXP’s price is currently discounted.
RXP’s high dividend payments make it one of the best dividend stocks on the market, and it has also been able to maintain it at a level in which net income is able to cover dividend payments.
Next Steps:
For RXP Services, I’ve put together three relevant factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for RXP’s future growth? Take a look at our free research report of analyst consensus for RXP’s outlook.
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Historical Performance: What has RXP’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RXP? 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.