Should Waddell & Reed Financial Inc (NYSE:WDR) Be Your Next Stock Pick?
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Waddell & Reed Financial Inc (NYSE:WDR) due to its excellent fundamentals in more than one area. WDR is a financially-sound company with a a strong track record superior dividend payments, trading at a discount. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Waddell & Reed Financial here.
Flawless balance sheet 6 star dividend payer
WDR is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. WDR’s has produced operating cash levels of 0.43x total debt over the past year, which implies that WDR’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. WDR’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if WDR’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, WDR’s share price is trading below the group’s average. This supports the theory that WDR is potentially underpriced.
WDR’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 5.16%.
Next Steps:
For Waddell & Reed Financial, there are three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for WDR’s future growth? Take a look at our free research report of analyst consensus for WDR’s outlook.
Historical Performance: What has WDR’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 WDR? 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 pass 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.
