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ARB Corporation Limited (ASX:ARB) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of ARB, it is a financially-sound , dividend-paying company with a a strong track record 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 ARB here.
Excellent balance sheet with proven track record and pays a dividend
In the previous year, ARB has ramped up its bottom line by 11%, with its latest earnings level surpassing its average level over the last five years. Not only did ARB outperformed its past performance, its growth also exceeded the Auto Components industry expansion, which generated a 3.8% earnings growth. This is what investors like to see! ARB’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. ARB seems to have put its debt to good use, generating operating cash levels of 19.96x 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.
Income investors would also be happy to know that ARB is a great dividend company, with a current yield standing at 2.0%. ARB has also been regularly increasing its dividend payments to shareholders over the past decade.
For ARB, there are three relevant factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for ARB’s future growth? Take a look at our free research report of analyst consensus for ARB’s outlook.
- Valuation: What is ARB 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 ARB is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ARB? 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.