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Does The Data Make SSE plc (LON:SSE) An Attractive Investment?

Simply Wall St

I've been keeping an eye on SSE plc (LON:SSE) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe SSE has a lot to offer. Basically, it is a well-regarded dividend-paying company with a great track record of performance, trading at a discount. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, read the full report on SSE here.

6 star dividend payer and good value

SSE 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. In addition to beating its historical values, SSE also outperformed its industry, which delivered a growth of -7.7%. This is what investors like to see! SSE's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. 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. Also, relative to the rest of its peers with similar levels of earnings, SSE's share price is trading below the group's average. This bolsters the proposition that SSE's price is currently discounted.

LSE:SSE Income Statement, August 29th 2019

SSE’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 8.7%.

LSE:SSE Historical Dividend Yield, August 29th 2019

Next Steps:

For SSE, I've compiled three essential aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for SSE’s future growth? Take a look at our free research report of analyst consensus for SSE’s outlook.
  2. Financial Health: Are SSE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SSE? 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.