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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Dunelm Group plc (LON:DNLM) due to its excellent fundamentals in more than one area. DNLM is a financially-healthy , dividend-paying company with an impressive history of performance. In the following section, I expand a bit more 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 Dunelm Group here.
Established dividend payer with adequate balance sheet
In the previous year, DNLM has ramped up its bottom line by 14%, with its latest earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 54%, which is an optimistic signal for the future. DNLM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that DNLM manages its cash and cost levels well, which is a key determinant of the company’s health. DNLM appears to have made good use of debt, producing operating cash levels of 1.55x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Income investors would also be happy to know that DNLM is a great dividend company, with a current yield standing at 3.1%. DNLM has also been regularly increasing its dividend payments to shareholders over the past decade.
Next Steps:
For Dunelm Group, I’ve put together three important aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for DNLM’s future growth? Take a look at our free research report of analyst consensus for DNLM’s outlook.
- Valuation: What is DNLM 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 DNLM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DNLM? 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 editorial-team@simplywallst.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.