A Holistic Look At IPH Limited (ASX:IPH)

IPH Limited (ASX:IPH) 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 IPH, it is a financially-robust company with a great track record and a buoyant future outlook. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my broad commentary, read the full report on IPH here.

Excellent balance sheet with reasonable growth potential

IPH delivered a bottom-line expansion of 11% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did IPH outperformed its past performance, its growth also surpassed the Professional Services industry expansion, which generated a 11% earnings growth. This is what investors like to see!

ASX:IPH Past and Future Earnings, August 11th 2019
ASX:IPH Past and Future Earnings, August 11th 2019

IPH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that IPH has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. IPH’s has produced operating cash levels of 1.68x total debt over the past year, which implies that IPH’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

ASX:IPH Historical Debt, August 11th 2019
ASX:IPH Historical Debt, August 11th 2019

Next Steps:

For IPH, I’ve put together three fundamental factors you should look at:

  1. Valuation: What is IPH 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 IPH is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does IPH 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 IPH as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of IPH? 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.