Why Fundamental Investors Might Love Associated British Foods plc (LON:ABF)

I’ve been keeping an eye on Associated British Foods plc (LON:ABF) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe ABF has a lot to offer. Basically, it is a dependable dividend-paying company that has been able to sustain great financial health over the past. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Associated British Foods here.

Flawless balance sheet average dividend payer

ABF’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 a key determinant of the company’s health. ABF appears to have made good use of debt, producing operating cash levels of 2x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

LSE:ABF Historical Debt, September 1st 2019
LSE:ABF Historical Debt, September 1st 2019

For those seeking income streams from their portfolio, ABF is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 2.0%.

LSE:ABF Historical Dividend Yield, September 1st 2019
LSE:ABF Historical Dividend Yield, September 1st 2019

Next Steps:

For Associated British Foods, I’ve put together three essential factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for ABF’s future growth? Take a look at our free research report of analyst consensus for ABF’s outlook.
  2. Historical Performance: What has ABF’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.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ABF? 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.