Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
Attractive stocks have exceptional fundamentals. In the case of Steelcase Inc. (NYSE:SCS), there's is a financially-healthy company with a a strong history of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Steelcase here.
Undervalued established dividend payer
SCS delivered a bottom-line expansion of 56% in the prior year, with its most recent earnings level surpassing its average level over the last five years. In addition to beating its historical values, SCS also outperformed its industry, which delivered a growth of -0.4%. This is an optimistic signal for the future. SCS is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that SCS has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. SCS appears to have made good use of debt, producing operating cash levels of 0.27x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
SCS is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if SCS's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the commercial services industry, SCS is also trading below its peers, relative to earnings generated. This bolsters the proposition that SCS's price is currently discounted.
For Steelcase, I've compiled three important aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for SCS’s future growth? Take a look at our free research report of analyst consensus for SCS’s outlook.
- Dividend Income vs Capital Gains: Does SCS 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 SCS as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SCS? 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.