Collection House Limited (ASX:CLH) 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 CLH, it is a financially-sound company with a a great track record superior dividend payments, trading at a great value. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Collection House here.
Undervalued established dividend payer
CLH 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. CLH appears to have made good use of debt, producing operating cash levels of 0.48x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. CLH 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 CLH’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the commercial services industry, CLH is also trading below its peers, relative to earnings generated. This bolsters the proposition that CLH’s price is currently discounted.
CLH is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.
For Collection House, I’ve compiled three pertinent factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CLH’s future growth? Take a look at our free research report of analyst consensus for CLH’s outlook.
- Historical Performance: What has CLH’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 CLH? 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.