ARB Corporation Limited (ASX:ARB) 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 ARB, it is a financially-healthy , dividend-paying company with a strong history of performance. Below is a brief commentary 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 ARB here.
Flawless balance sheet with proven track record and pays a dividend
In the previous year, ARB has ramped up its bottom line by 12%, with its latest earnings level surpassing its average level over the last five years. Not only did ARB outperformed its past performance, its growth also exceeded the Auto Components industry expansion, which generated a -2.7% earnings growth. This paints a buoyant picture for the company. ARB'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 ARB manages its cash and cost levels well, which is an important determinant of the company’s health. Investors should not worry about ARB’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
ARB 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.
For ARB, I've compiled three essential aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for ARB’s future growth? Take a look at our free research report of analyst consensus for ARB’s outlook.
- Valuation: What is ARB 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 ARB is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ARB? 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 firstname.lastname@example.org. 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.