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A Look At Clover Corporation Limited's (ASX:CLV) Exceptional Fundamentals

Simply Wall St

Clover Corporation Limited (ASX:CLV) 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 CLV, it is a financially-healthy company with an impressive track record and a buoyant future outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Clover here.

Outstanding track record with high growth potential

One reason why investors are attracted to CLV is its earnings growth potential in the near future of 25% which is expected to flow into an impressive return on equity of 25% over the next couple of years. Over the past year, CLV has grown its earnings by 53%, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 22% return to shareholders, which paints a buoyant picture for the company.

ASX:CLV Past and Future Earnings, September 4th 2019
ASX:CLV Past and Future Earnings, September 4th 2019

CLV'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 implies that CLV manages its cash and cost levels well, which is a key determinant of the company’s health. CLV seems to have put its debt to good use, generating operating cash levels of 0.47x 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:CLV Historical Debt, September 4th 2019
ASX:CLV Historical Debt, September 4th 2019

Next Steps:

For Clover, I've put together three relevant factors you should further research:

  1. Valuation: What is CLV 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 CLV is currently mispriced by the market.

  2. Dividend Income vs Capital Gains: Does CLV 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 CLV as an investment.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CLV? 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.