STMicroelectronics N.V. (EPA:STM) 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 STM, it is a company with great financial health as well as a a strong track record of performance. Below is a brief commentary 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 STMicroelectronics here.
Outstanding track record with excellent balance sheet
In the past couple of years, STM has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 20% return to shareholders, which paints a buoyant picture for the company. STM’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that STM manages its cash and cost levels well, which is a key determinant of the company’s health. STM appears to have made good use of debt, producing operating cash levels of 1.08x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For STMicroelectronics, I’ve compiled three essential aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for STM’s future growth? Take a look at our free research report of analyst consensus for STM’s outlook.
- Valuation: What is STM 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 STM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of STM? 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.