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Baidu, Inc. (NASDAQ:BIDU): A Fundamentally Attractive Investment

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of Baidu, Inc. (NASDAQ:BIDU), there's is a financially-healthy company with a excellent future outlook, not yet reflected in the share price. 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 Baidu here.

Flawless balance sheet and good value

BIDU's share price is trading below its true value according to its price-to-earnings ratio of 11.65x compared to its industry as well as the wider stock market, so potential investors can purchase the stock below its value.

NasdaqGS:BIDU Past and Future Earnings, August 18th 2019

BIDU'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 BIDU manages its cash and cost levels well, which is a key determinant of the company’s health. BIDU seems to have put its debt to good use, generating operating cash levels of 0.51x 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.

NasdaqGS:BIDU Historical Debt, August 18th 2019

Next Steps:

For Baidu, I've put together three essential aspects you should further research:

  1. Historical Performance: What has BIDU'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.

  2. Dividend Income vs Capital Gains: Does BIDU 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 BIDU as an investment.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BIDU? 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.