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 Louisiana-Pacific Corporation (NYSE:LPX), it is a company with great financial health as well as a an impressive track record of performance. 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, take a look at the report on Louisiana-Pacific here.
Flawless balance sheet with proven track record
LPX has a strong track record of performance. In the previous year, LPX delivered an impressive double-digit return of 26%. Unsurprisingly, LPX surpassed the Forestry industry return of 16%, which gives us more confidence of the company's capacity to drive earnings going forward. LPX'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 indicates that LPX has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. LPX's has produced operating cash levels of 1.21x total debt over the past year, which implies that LPX's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Louisiana-Pacific, I've compiled three pertinent factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for LPX’s future growth? Take a look at our free research report of analyst consensus for LPX’s outlook.
- Valuation: What is LPX 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 LPX is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LPX? 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.