Attractive stocks have exceptional fundamentals. In the case of OZ Minerals Limited (ASX:OZL), there’s is a financially-healthy 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. For those interested in digger a bit deeper into my commentary, read the full report on OZ Minerals here.
Very undervalued with flawless balance sheet
In the previous year, OZL has ramped up its bottom line by 75%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, OZL also outperformed its industry, which delivered a growth of 26%. This is what investors like to see! OZL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that OZL manages its cash and cost levels well, which is a key determinant of the company’s health. Looking at OZL’s capital structure, the company has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
OZL is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. 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. Also, relative to the rest of its peers with similar levels of earnings, OZL’s share price is trading below the group’s average. This supports the theory that OZL is potentially underpriced.
For OZ Minerals, I’ve compiled three fundamental aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for OZL’s future growth? Take a look at our free research report of analyst consensus for OZL’s outlook.
- Dividend Income vs Capital Gains: Does OZL 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 OZL as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of OZL? 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.