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How Associated British Foods plc (LON:ABF) Could Add Value To Your Portfolio

Simply Wall St

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Associated British Foods plc (LON:ABF) 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 ABF, it is a notable dividend-paying company that has been able to sustain great financial health over the past. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Associated British Foods here.

Flawless balance sheet average dividend payer

ABF'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. ABF seems to have put its debt to good use, generating operating cash levels of 1.96x 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.

LSE:ABF Historical Debt, June 17th 2019

For those seeking income streams from their portfolio, ABF is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 1.8%.

LSE:ABF Historical Dividend Yield, June 17th 2019

Next Steps:

For Associated British Foods, I've compiled three important aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for ABF’s future growth? Take a look at our free research report of analyst consensus for ABF’s outlook.
  2. Historical Performance: What has ABF'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.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ABF? 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.