Quaker Chemical Corporation (NYSE:KWR) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of KWR, it is a financially-sound company with an impressive track record and a excellent growth outlook. 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, read the full report on Quaker Chemical here.
Flawless balance sheet with proven track record
KWR is an attractive stock for growth-seeking investors, with an expected earnings growth of 35% in the upcoming year. Earnings growth is paired with an eye-catching top-line trajectory of 100%, which indicates a high-quality bottom-line expansion, as opposed to those driven simple by unsustainable cost-cutting activities. KWR delivered a bottom-line expansion of 71% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did KWR outperformed its past performance, its growth also surpassed the Chemicals industry expansion, which generated a -1.9% earnings growth. This is an notable feat for the company.
KWR is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that KWR has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. KWR's has produced operating cash levels of 6.54x total debt over the past year, which implies that KWR's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Quaker Chemical, I've compiled three relevant aspects you should look at:
- Valuation: What is KWR 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 KWR is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does KWR return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from KWR as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KWR? 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 email@example.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.