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Is DCM Shriram Limited (NSE:DCMSHRIRAM) Potentially Underrated?

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of DCM Shriram Limited (NSE:DCMSHRIRAM), there's is a financially-robust , dividend-paying company with an impressive track record of performance. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at the report on DCM Shriram here.

Outstanding track record with excellent balance sheet and pays a dividend

Over the past year, DCMSHRIRAM has grown its earnings by 39%, with its most recent figure exceeding its annual average over the past five years. This strong performance generated a robust double-digit return on equity of 26%, which is an optimistic signal for the future. DCMSHRIRAM'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 suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. DCMSHRIRAM's has produced operating cash levels of 0.48x total debt over the past year, which implies that DCMSHRIRAM's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

NSEI:DCMSHRIRAM Income Statement, September 20th 2019

Income investors would also be happy to know that DCMSHRIRAM is one of the highest dividend payers in the market, with current dividend yield standing at 2.4%. DCMSHRIRAM has also been regularly increasing its dividend payments to shareholders over the past decade.

NSEI:DCMSHRIRAM Historical Dividend Yield, September 20th 2019

Next Steps:

For DCM Shriram, there are three pertinent aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for DCMSHRIRAM’s future growth? Take a look at our free research report of analyst consensus for DCMSHRIRAM’s outlook.
  2. Valuation: What is DCMSHRIRAM 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 DCMSHRIRAM is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DCMSHRIRAM? 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.