As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Encana Corporation (TSE:ECA), it is a company with a great track record of performance, trading at a great value. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Encana here.
Undervalued with solid track record
ECA 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 ECA outperformed its past performance, its growth also exceeded the Oil and Gas industry expansion, which generated a 62% earnings growth. This is what investors like to see! ECA'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, ECA's share price is trading below the group's average. This bolsters the proposition that ECA's price is currently discounted.
For Encana, I've put together three relevant factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for ECA’s future growth? Take a look at our free research report of analyst consensus for ECA’s outlook.
- Financial Health: Are ECA’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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ECA? 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 email@example.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.