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An Examination Of Wayside Technology Group, Inc. (NASDAQ:WSTG)

Simply Wall St

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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 Wayside Technology Group, Inc. (NASDAQ:WSTG), it is a financially-healthy company with a a great history superior dividend payments, trading at a discount. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Wayside Technology Group here.

Undervalued with excellent balance sheet and pays a dividend

WSTG is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. WSTG appears to have made good use of debt, producing operating cash levels of 3.98x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. WSTG's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of WSTG's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, WSTG's share price is trading below the group's average. This supports the theory that WSTG is potentially underpriced.

NasdaqGM:WSTG Price Estimation Relative to Market, June 6th 2019
NasdaqGM:WSTG Price Estimation Relative to Market, June 6th 2019

WSTG’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 6.0%.

NasdaqGM:WSTG Historical Dividend Yield, June 6th 2019
NasdaqGM:WSTG Historical Dividend Yield, June 6th 2019

Next Steps:

For Wayside Technology Group, there are three pertinent aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for WSTG’s future growth? Take a look at our free research report of analyst consensus for WSTG’s outlook.

  2. Historical Performance: What has WSTG'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.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of WSTG? 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.