First Derivatives plc (LON:FDP) 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 FDP, it is a financially-healthy , dividend-paying company with an impressive history of performance. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my broad commentary, read the full report on First Derivatives here.
Excellent balance sheet with solid track record and pays a dividend
Over the past year, FDP has grown its earnings by 29%, with its most recent figure exceeding its annual average over the past five years. Not only did FDP outperformed its past performance, its growth also surpassed the Software industry expansion, which generated a 4.2% earnings growth. This is an notable feat for the company. With a debt-to-equity ratio of 24%, FDP’s debt level is reasonable. This means that FDP’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt. FDP’s has produced operating cash levels of 0.68x total debt over the past year, which implies that FDP’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
FDP is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.
Next Steps:
For First Derivatives, I’ve put together three essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for FDP’s future growth? Take a look at our free research report of analyst consensus for FDP’s outlook.
- Valuation: What is FDP 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 FDP is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FDP? 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.