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A Spotlight On Associated British Foods plc’s (LON:ABF) Fundamentals

Isabel Galloway

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Associated British Foods plc (LON:ABF) due to its excellent fundamentals in more than one area. ABF is a well-regarded dividend-paying company that has been able to sustain great financial health over the past. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on Associated British Foods here.

Flawless balance sheet established dividend payer

ABF is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that ABF has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. ABF seems to have put its debt to good use, generating operating cash levels of 1.84x 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.

LSE:ABF Historical Debt December 25th 18

ABF is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.

LSE:ABF Historical Dividend Yield December 25th 18

Next Steps:

For Associated British Foods, there are three pertinent aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for ABF’s future growth? Take a look at our free research report of analyst consensus for ABF’s outlook.
  2. Historical Performance: What has ABF’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 ABF? 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.