Should GWA Group Limited (ASX:GWA) Be Your Next Stock Pick?

Attractive stocks have exceptional fundamentals. In the case of GWA Group Limited (ASX:GWA), there’s is a company with great financial health as well as a a strong track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on GWA Group here.

Flawless balance sheet with proven track record

Over the past few years, GWA has demonstrated a proven ability to generate robust returns of 12% Unsurprisingly, GWA surpassed the industry return of 7.1%, which gives us more confidence of the company’s capacity to drive earnings going forward. GWA’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that GWA has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. GWA’s has produced operating cash levels of 1.78x total debt over the past year, which implies that GWA’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

ASX:GWA Income Statement, March 7th 2019
ASX:GWA Income Statement, March 7th 2019

Next Steps:

For GWA Group, there are three relevant aspects you should further examine:

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