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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Chaparral Energy, Inc. (NYSE:CHAP) due to its excellent fundamentals in more than one area. CHAP is a financially-robust company with a a buoyant future outlook, not yet reflected in the share price. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Chaparral Energy here.
Excellent balance sheet and good value
CHAP's shares are now trading at a price below its true value based on its PE ratio of 6.88x, compared to the industry and wider stock market ratio, so potential investors can purchase the stock below its value.
CHAP's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. CHAP seems to have put its debt to good use, generating operating cash levels of 0.48x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Chaparral Energy, I've put together three relevant factors you should look at:
- Historical Performance: What has CHAP'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.
- Dividend Income vs Capital Gains: Does CHAP 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 CHAP as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CHAP? 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 firstname.lastname@example.org. 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.