I’ve been keeping an eye on China Communications Construction Company Limited (HKG:1800) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 1800 has a lot to offer. Basically, it is a financially-sound company with a an impressive track record of performance, trading at a great value. 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 China Communications Construction here.
Very undervalued established dividend payer
In the previous year, 1800 has ramped up its bottom line by 23.5%, with its latest earnings level surpassing its average level over the last five years. Not only did 1800 outperformed its past performance, its growth also exceeded the Construction industry expansion, which generated a -9.8% earnings growth. This is what investors like to see! 1800’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that 1800 has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. 1800’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps 1800 expand.
1800 is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 1800’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, 1800’s share price is trading below the group’s average. This further reaffirms that 1800 is potentially undervalued.
For China Communications Construction, I’ve put together three key aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for 1800’s future growth? Take a look at our free research report of analyst consensus for 1800’s outlook.
- Dividend Income vs Capital Gains: Does 1800 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 1800 as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1800? 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.