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Is Multi Commodity Exchange of India Limited (NSE:MCX) Potentially Underrated?

Simply Wall St

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Attractive stocks have exceptional fundamentals. In the case of Multi Commodity Exchange of India Limited (NSE:MCX), there's is a financially-robust , dividend-paying company with a strong track record of performance. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Multi Commodity Exchange of India here.

Flawless balance sheet with solid track record and pays a dividend

MCX delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. Not only did MCX outperformed its past performance, its growth also surpassed the Capital Markets industry expansion, which generated a -7.6% earnings growth. This paints a buoyant picture for the company. MCX'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 MCX manages its cash and cost levels well, which is a crucial insight into the health of the company. Looking at MCX's capital structure, the company has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.

NSEI:MCX Income Statement, July 19th 2019

MCX's high dividend payments make it one of the best dividend stocks on the market, and it has also been able to maintain it at a level in which net income is able to cover dividend payments.

NSEI:MCX Historical Dividend Yield, July 19th 2019

Next Steps:

For Multi Commodity Exchange of India, I've put together three fundamental aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for MCX’s future growth? Take a look at our free research report of analyst consensus for MCX’s outlook.
  2. Valuation: What is MCX 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 MCX is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MCX? 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.