I've been keeping an eye on The Greenbrier Companies, Inc. (NYSE:GBX) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe GBX has a lot to offer. Basically, it is a financially-sound company with a strong history superior dividend payments, trading at a great value. 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, read the full report on Greenbrier Companies here.
Undervalued with excellent balance sheet and pays a dividend
GBX is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that GBX has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. GBX’s debt-to-equity ratio stands at 35%, which means its debt level is reasonable. This implies that GBX has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt. GBX's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if GBX's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the machinery industry, GBX is also trading below its peers, relative to earnings generated. This further reaffirms that GBX is potentially undervalued.
GBX’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 4.6%.
For Greenbrier Companies, I've put together three key aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for GBX’s future growth? Take a look at our free research report of analyst consensus for GBX’s outlook.
- Historical Performance: What has GBX'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 GBX? 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.