Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on The Estée Lauder Companies Inc. (NYSE:EL) due to its excellent fundamentals in more than one area. EL is a financially-sound , dividend-paying company with a strong history of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Estée Lauder Companies here.
Outstanding track record with adequate balance sheet and pays a dividend
In the previous year, EL has ramped up its bottom line by 58%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 40% return to shareholders, which is what investors like to see! EL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that EL has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. EL's has produced operating cash levels of 0.71x total debt over the past year, which implies that EL's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
EL 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 Estée Lauder Companies, I've put together three essential factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for EL’s future growth? Take a look at our free research report of analyst consensus for EL’s outlook.
- Valuation: What is EL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EL is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of EL? 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.