Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on KLA-Tencor Corporation (NASDAQ:KLAC) due to its excellent fundamentals in more than one area. KLAC is a financially-healthy , dividend-paying company with a a great track record of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on KLA-Tencor here.
Solid track record established dividend payer
In the past couple of years, KLAC has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. Not only did KLAC outperformed its past performance, its growth also exceeded the Semiconductor industry expansion, which generated a 37% earnings growth. This is what investors like to see! KLAC'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 key determinant of the company’s health. KLAC appears to have made good use of debt, producing operating cash levels of 0.62x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Income investors would also be happy to know that KLAC is a great dividend company, with a current yield standing at 2.4%. KLAC has also been regularly increasing its dividend payments to shareholders over the past decade.
For KLA-Tencor, there are three essential factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for KLAC’s future growth? Take a look at our free research report of analyst consensus for KLAC’s outlook.
- Valuation: What is KLAC 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 KLAC is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KLAC? 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 firstname.lastname@example.org. 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.