Why Fundamental Investors Might Love Australian Pharmaceutical Industries Limited (ASX:API)
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Australian Pharmaceutical Industries Limited (ASX:API) 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 API, it is a highly-regarded dividend payer that has been a rockstar for income investors, currently trading at an attractive share price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Australian Pharmaceutical Industries here.
Undervalued established dividend payer
API's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Compared to the rest of the healthcare industry, API is also trading below its peers, relative to earnings generated. This supports the theory that API is potentially underpriced.
For those seeking income streams from their portfolio, API is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 6.0%, making it one of the best dividend companies in the market.
Next Steps:
For Australian Pharmaceutical Industries, I've put together three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for API’s future growth? Take a look at our free research report of analyst consensus for API’s outlook.
Historical Performance: What has API'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 API? 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 editorial-team@simplywallst.com. 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.
