August Fundamental Stock Pick: Pernod Ricard SA (EPA:RI)
I’ve been keeping an eye on Pernod Ricard SA (EPA:RI) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe RI has a lot to offer. Basically, it is a financially-sound , dividend-paying company with a a great history of performance. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, take a look at the report on Pernod Ricard here.
Solid track record with adequate balance sheet and pays a dividend
In the previous year, RI has ramped up its bottom line by 28.7%, with its latest earnings level surpassing its average level over the last five years. Not only did RI outperformed its past performance, its growth also exceeded the Beverage industry expansion, which generated a 11.2% earnings growth. This is an optimistic signal for the future. RI is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that RI manages its cash and cost levels well, which is an important determinant of the company’s health. RI’s has produced operating cash levels of 0.21x total debt over the past year, which implies that RI’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
Income investors would also be happy to know that RI is a great dividend company, with a current yield standing at 1.5%. RI has also been regularly increasing its dividend payments to shareholders over the past decade.
Next Steps:
For Pernod Ricard, I’ve compiled three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for RI’s future growth? Take a look at our free research report of analyst consensus for RI’s outlook.
Valuation: What is RI 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 RI is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RI? 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.
