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A Holistic Look At DS Smith Plc (LON:SMDS)

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 DS Smith Plc (LON:SMDS), it is a notable dividend payer with a an impressive history of performance, trading at a discount. 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 DS Smith here.

Good value with proven track record and pays a dividend

Over the past year, SMDS has grown its earnings by 24%, with its most recent figure exceeding its annual average over the past five years. In addition to beating its historical values, SMDS also outperformed its industry, which delivered a growth of 12%. This is an notable feat for the company. SMDS is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. 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, SMDS’s share price is trading below the group’s average. This supports the theory that SMDS is potentially underpriced.

LSE:SMDS Income Statement Export December 5th 18

SMDS is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.

LSE:SMDS Historical Dividend Yield December 5th 18

Next Steps:

For DS Smith, I’ve compiled three pertinent aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for SMDS’s future growth? Take a look at our free research report of analyst consensus for SMDS’s outlook.
  2. Financial Health: Are SMDS’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.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SMDS? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.