Yanzhou Coal Mining Company Limited (HKG:1171) 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 1171, it is a financially-healthy company with a great history high-grade dividend payments, trading at a discount. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Yanzhou Coal Mining here.
Undervalued with excellent balance sheet and pays a dividend
1171's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. 1171's has produced operating cash levels of 0.43x total debt over the past year, which implies that 1171's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. 1171'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 1171'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, 1171's share price is trading below the group's average. This further reaffirms that 1171 is potentially undervalued.
For those seeking income streams from their portfolio, 1171 is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 9.6%, making it one of the best dividend companies in the market.
For Yanzhou Coal Mining, I've compiled three relevant aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for 1171’s future growth? Take a look at our free research report of analyst consensus for 1171’s outlook.
- Historical Performance: What has 1171'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 1171? 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.