I've been keeping an eye on China Yuchai International Limited (NYSE:CYD) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe CYD has a lot to offer. Basically, it is a financially-healthy company with a a strong track record high-grade dividend payments, trading at a great value. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at the report on China Yuchai International here.
Very undervalued with flawless balance sheet and pays a dividend
CYD 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 crucial insight into the health of the company. CYD's has produced operating cash levels of 0.84x total debt over the past year, which implies that CYD's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. CYD is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if CYD's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, CYD's share price is trading below the group's average. This supports the theory that CYD is potentially underpriced.
Income investors would also be happy to know that CYD is one of the highest dividend payers in the market, with current dividend yield standing at 4.2%. CYD has also been regularly increasing its dividend payments to shareholders over the past decade.
For China Yuchai International, I've compiled three pertinent aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CYD’s future growth? Take a look at our free research report of analyst consensus for CYD’s outlook.
- Historical Performance: What has CYD'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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CYD? 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.