Reece Limited (ASX:REH) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of REH, it is a financially-healthy company with a an impressive history of dividend payments and a excellent growth outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Reece here.
Flawless balance sheet with reasonable growth potential and pays a dividend
REH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that REH manages its cash and cost levels well, which is a key determinant of the company’s health. Looking at REH’s capital structure, the company has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is rather impressive for a AU$6.1b market cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For those seeking income streams from their portfolio, REH is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 1.9%.
For Reece, there are three important aspects you should further examine:
- Historical Performance: What has REH’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.
- Valuation: What is REH 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 REH is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of REH? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.