Sonic Healthcare Limited (ASX:SHL): A Fundamentally Attractive Investment

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Attractive stocks have exceptional fundamentals. In the case of Sonic Healthcare Limited (ASX:SHL), there’s is a financially-sound , dividend-paying company with a strong track record of performance. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Sonic Healthcare here.

Established dividend payer with adequate balance sheet

SHL delivered a satisfying double-digit returns of 6.2% in the most recent year Not surprisingly, SHL outperformed its industry which returned 4.2%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward. SHL’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. SHL seems to have put its debt to good use, generating operating cash levels of 0.29x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

ASX:SHL Income Statement, July 12th 2019
ASX:SHL Income Statement, July 12th 2019

Income investors would also be happy to know that SHL is a great dividend company, with a current yield standing at 3.0%. SHL has also been regularly increasing its dividend payments to shareholders over the past decade.

ASX:SHL Historical Dividend Yield, July 12th 2019
ASX:SHL Historical Dividend Yield, July 12th 2019

Next Steps:

For Sonic Healthcare, I’ve put together three important factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for SHL’s future growth? Take a look at our free research report of analyst consensus for SHL’s outlook.
  2. Valuation: What is SHL 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 SHL is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SHL? 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.