Attractive stocks have exceptional fundamentals. In the case of Ternium SA (NYSE:TX), there’s is a financially-healthy company with a an impressive track record superior dividend payments, trading at a discount. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Ternium here.
Undervalued established dividend payer
TX is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that TX has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. TX’s has produced operating cash levels of 0.36x total debt over the past year, which implies that TX’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. TX’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if TX’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the metals and mining industry, TX is also trading below its peers, relative to earnings generated. This supports the theory that TX is potentially underpriced.
For those seeking income streams from their portfolio, TX is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 3.6%, making it one of the best dividend companies in the market.
For Ternium, there are three essential factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for TX’s future growth? Take a look at our free research report of analyst consensus for TX’s outlook.
- Historical Performance: What has TX’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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TX? 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.