Olin Corporation (NYSE:OLN) 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 OLN, it is a highly-regarded dividend-paying company with a a strong history of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Olin here.
Solid track record, good value and pays a dividend
In the past couple of years, OLN has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, OLN also outperformed its industry, which delivered a growth of 38%. This is an optimistic signal for the future. OLN’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 OLN’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, OLN’s share price is trading below the group’s average. This bolsters the proposition that OLN’s price is currently discounted.
OLN has been able to reinvest its profits, as well as pay some out as dividends, which has been consistently higher than the low-risk savings rate, adequately rewarding investors for taking on the risk of holding a stock over a riskless asset. However, it is important to remember that dividend yields are a function of stock prices and corporate profits, which can be volatile.
For Olin, I’ve put together three essential factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for OLN’s future growth? Take a look at our free research report of analyst consensus for OLN’s outlook.
- Financial Health: Are OLN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of OLN? 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 email@example.com.