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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Tower International, Inc. (NYSE:TOWR) due to its excellent fundamentals in more than one area. TOWR is a financially-robust company with a a strong track record of performance, trading at a discount. 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 Tower International here.
Good value with proven track record
Over the past year, TOWR has grown its earnings by 71%, with its most recent figure exceeding its annual average over the past five years. Not only did TOWR outperformed its past performance, its growth also exceeded the Auto Components industry expansion, which generated a 2.6% earnings growth. This is an notable feat for the company. TOWR is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that TOWR manages its cash and cost levels well, which is an important determinant of the company’s health. TOWR appears to have made good use of debt, producing operating cash levels of 0.32x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
TOWR's shares are now trading at a price below its true value based on its PE ratio of 5.47x, compared to the industry and wider stock market ratio, which means it is relatively cheaper than its peers.
For Tower International, there are three pertinent aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for TOWR’s future growth? Take a look at our free research report of analyst consensus for TOWR’s outlook.
- Dividend Income vs Capital Gains: Does TOWR 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 TOWR as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TOWR? 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.