Fanhua Inc (NASDAQ:FANH) 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 FANH, it is a financially-sound company with an impressive history and an optimistic growth outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Fanhua here.
Flawless balance sheet with solid track record
FANH delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. Not only did FANH outperformed its past performance, its growth also surpassed the Insurance industry expansion, which generated a 3.77% earnings growth. This is what investors like to see!
FANH’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that FANH has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. FANH currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is rather impressive for a US$2.27B market cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For Fanhua, there are three fundamental factors you should further examine:
- Valuation: What is FANH 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 FANH is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does FANH 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 FANH as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FANH? 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 pass 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.