GAIL (India) Limited (NSE:GAIL) 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 GAIL, it is a financially-sound company with a strong track record high-quality dividend payments, trading at a great value. 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, take a look at the report on GAIL (India) here.
Excellent balance sheet established dividend payer
GAIL’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. GAIL’s has produced operating cash levels of 3.59x total debt over the past year, which implies that GAIL’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. GAIL is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the gas utilities industry, GAIL is also trading below its peers, relative to earnings generated. This supports the theory that GAIL is potentially underpriced.
GAIL’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 2.9%.
For GAIL (India), I’ve put together three essential factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for GAIL’s future growth? Take a look at our free research report of analyst consensus for GAIL’s outlook.
- Historical Performance: What has GAIL’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 GAIL? 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.