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A Holistic Look At CSL Limited (ASX:CSL)

Simply Wall St

CSL Limited (ASX:CSL) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of CSL, it is a financially-robust company with an impressive history and a excellent growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on CSL here.

Solid track record with reasonable growth potential

Over the past year, CSL has grown its earnings by 11%, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 37% return to shareholders, which is an notable feat for the company.

ASX:CSL Past and Future Earnings, August 16th 2019

CSL's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. CSL seems to have put its debt to good use, generating operating cash levels of 0.35x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

ASX:CSL Historical Debt, August 16th 2019

Next Steps:

For CSL, I've put together three key factors you should further examine:

  1. Valuation: What is CSL 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 CSL is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does CSL 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 CSL as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CSL? 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.