Should You Consider GUD Holdings Limited (ASX:GUD)?

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I’ve been keeping an eye on GUD Holdings Limited (ASX:GUD) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe GUD has a lot to offer. Basically, it is a financially-sound company with a great track record and a excellent growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on GUD Holdings here.

Excellent balance sheet with proven track record

GUD has a strong track record of performance. In the previous year, GUD delivered an impressive double-digit return of 12% Unsurprisingly, GUD surpassed the industry return of 7.2%, which gives us more confidence of the company’s capacity to drive earnings going forward.

ASX:GUD Past and Future Earnings, June 3rd 2019
ASX:GUD Past and Future Earnings, June 3rd 2019

GUD is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that GUD has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. GUD appears to have made good use of debt, producing operating cash levels of 0.28x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

ASX:GUD Historical Debt, June 3rd 2019
ASX:GUD Historical Debt, June 3rd 2019

Next Steps:

For GUD Holdings, I’ve compiled three important aspects you should further research:

  1. Valuation: What is GUD 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 GUD is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does GUD return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from GUD as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of GUD? 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.