In This Article:
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SKYCITY Entertainment Group Limited (NZSE:SKC) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of SKC, it is a financially-robust company with a an impressive track record superior dividend payments, trading at a discount. 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 SKYCITY Entertainment Group here.
Undervalued with adequate balance sheet and pays a dividend
SKC'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 implies that SKC manages its cash and cost levels well, which is a key determinant of the company’s health. SKC's has produced operating cash levels of 0.35x total debt over the past year, which implies that SKC's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. SKC's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if SKC's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the hospitality industry, SKC is also trading below its peers, relative to earnings generated. This bolsters the proposition that SKC's price is currently discounted.
SKC is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.
Next Steps:
For SKYCITY Entertainment Group, I've put together three pertinent factors you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for SKC’s future growth? Take a look at our free research report of analyst consensus for SKC’s outlook.
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Historical Performance: What has SKC'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 SKC? 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.