Fanhua Inc (NASDAQ:FANH) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of FANH, it is a financially-healthy company with a great track record and an optimistic growth outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on Fanhua here.
Flawless balance sheet with solid track record
FANH 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 FANH outperformed its past performance, its growth also exceeded the Insurance industry expansion, which generated a 3.77% earnings growth. This is an optimistic signal for the future.
FANH 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 an important determinant of the company’s health. Investors should not worry about FANH’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is rather impressive for a US$2.25b market cap company. FANH has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For Fanhua, there are three important aspects you should further research:
- Valuation: What is FANH 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 FANH is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does FANH 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 FANH as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FANH? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.