Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Renishaw plc (LON:RSW) due to its excellent fundamentals in more than one area. RSW is a financially-robust , dividend-paying company with a a great track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Renishaw here.
Flawless balance sheet with proven track record and pays a dividend
In the previous year, RSW has ramped up its bottom line by 29%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 24%. which paints a buoyant picture for the company. RSW is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that RSW has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. Looking at RSW’s capital structure, the company has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is rather impressive for a UK£3.1b market cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
For those seeking income streams from their portfolio, RSW is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 1.4%.
For Renishaw, there are three fundamental factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for RSW’s future growth? Take a look at our free research report of analyst consensus for RSW’s outlook.
- Valuation: What is RSW 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 RSW is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RSW? 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 firstname.lastname@example.org.