I've been keeping an eye on Athens Water Supply and Sewerage Company S.A. (ATH:EYDAP) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe EYDAP has a lot to offer. Basically, it is a financially-healthy company with a strong track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Athens Water Supply and Sewerage here.
Flawless balance sheet and good value
In the previous year, EYDAP has ramped up its bottom line by 11%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, EYDAP also outperformed its industry, which delivered a growth of 6.8%. This paints a buoyant picture for the company. EYDAP's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that EYDAP manages its cash and cost levels well, which is an important determinant of the company’s health. Investors should not worry about EYDAP’s debt levels because the company has none! This implies that the company is running its operations purely on off equity funding. 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.
EYDAP's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Compared to the rest of the utilities industry, EYDAP is also trading below its peers, relative to earnings generated. This supports the theory that EYDAP is potentially underpriced.
For Athens Water Supply and Sewerage, I've compiled three essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for EYDAP’s future growth? Take a look at our free research report of analyst consensus for EYDAP’s outlook.
- Dividend Income vs Capital Gains: Does EYDAP 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 EYDAP as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of EYDAP? 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.