ASML Holding N.V. (AMS:ASML) 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 ASML, it is a financially-healthy 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 digging a bit deeper into my commentary, read the full report on ASML Holding here.
High growth potential with excellent balance sheet
ASML is an attractive stock for growth-seeking investors, with an expected earnings growth of 26% in the upcoming year underlying the notable 21% return on equity over the next few years leading up to 2022. Over the past few years, ASML has demonstrated a proven ability to generate robust returns of 12% Unsurprisingly, ASML surpassed the industry return of 5.7%, which gives us more confidence of the company's capacity to drive earnings going forward.
ASML is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that ASML manages its cash and cost levels well, which is a crucial insight into the health of the company. ASML's has produced operating cash levels of 0.59x total debt over the past year, which implies that ASML's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For ASML Holding, I've compiled three important factors you should further research:
- Valuation: What is ASML 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 ASML is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does ASML 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 ASML as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ASML? 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.