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Schaffer Corporation Limited (ASX:SFC): Commentary On Fundamentals

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of Schaffer Corporation Limited (ASX:SFC), there's is a financially-robust , dividend-paying company with a great 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, read the full report on Schaffer here.

Flawless balance sheet with solid track record and pays a dividend

SFC delivered a satisfying double-digit returns of 24% in the most recent year. Unsurprisingly, SFC surpassed the Auto Components industry return of 13%, which gives us more confidence of the company's capacity to drive earnings going forward. SFC'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 key determinant of the company’s health. SFC appears to have made good use of debt, producing operating cash levels of 2.15x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

ASX:SFC Income Statement, August 21st 2019

Income investors would also be happy to know that SFC is a great dividend company, with a current yield standing at 5.7%. SFC has also been regularly increasing its dividend payments to shareholders over the past decade.

ASX:SFC Historical Dividend Yield, August 21st 2019

Next Steps:

For Schaffer, I've put together three relevant aspects you should further examine:

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