Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on China Shenhua Energy Company Limited (HKG:1088) due to its excellent fundamentals in more than one area. 1088 is a financially-healthy company with a a great history high-grade dividend payments, trading at a great value. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on China Shenhua Energy here.
Excellent balance sheet established dividend payer
1088’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that 1088 has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. 1088 appears to have made good use of debt, producing operating cash levels of 0.81x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. 1088’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 1088’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the oil and gas industry, 1088 is also trading below its peers, relative to earnings generated. This further reaffirms that 1088 is potentially undervalued.
1088’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 5.3%.
For China Shenhua Energy, I’ve compiled three important aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for 1088’s future growth? Take a look at our free research report of analyst consensus for 1088’s outlook.
- Historical Performance: What has 1088’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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1088? 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 email@example.com.