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Ricardo plc (LON:RCDO): Commentary On Fundamentals

Cole Patterson

Ricardo plc (LON:RCDO) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of RCDO, it is a dependable dividend payer that has been able to sustain great financial health over the past. 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 Ricardo here.

Established dividend payer with adequate balance sheet

RCDO’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. RCDO’s has produced operating cash levels of 0.54x total debt over the past year, which implies that RCDO’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

LSE:RCDO Historical Debt August 29th 18

Income investors would also be happy to know that RCDO is a great dividend company, with a current yield standing at 2.5%. RCDO has also been regularly increasing its dividend payments to shareholders over the past decade.

LSE:RCDO Historical Dividend Yield August 29th 18

Next Steps:

For Ricardo, I’ve compiled three fundamental aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for RCDO’s future growth? Take a look at our free research report of analyst consensus for RCDO’s outlook.
  2. Historical Performance: What has RCDO’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.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RCDO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.