As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Quaker Chemical Corporation (NYSE:KWR), it is a financially-healthy company with an impressive track record and a excellent future outlook. 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 Quaker Chemical here.
Excellent balance sheet with proven track record
KWR is an attractive stock for growth-seeking investors, with an expected earnings growth of 37% in the upcoming year. The optimistic bottom-line growth is supported by a similarly outstanding revenue growth over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. KWR delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. In addition to beating its historical values, KWR also outperformed its industry, which delivered a growth of 18%. This is what investors like to see!
KWR is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that KWR manages its cash and cost levels well, which is a crucial insight into the health of the company. KWR’s has produced operating cash levels of 2.15x total debt over the past year, which implies that KWR’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Quaker Chemical, I’ve compiled three essential aspects you should further examine:
- Valuation: What is KWR 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 KWR is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does KWR 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 KWR as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KWR? 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 email@example.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.