Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Think Childcare Limited (ASX:TNK) due to its excellent fundamentals in more than one area. TNK is a dependable dividend payer with an optimistic growth outlook, not yet priced into the stock. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Think Childcare here.
Good value with reasonable growth potential and pays a dividend
TNK’s outstanding revenue growth of 64% forecasted for the near future is certainly eye-catching for investors on the hunt for growth, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to more than double over the next year. This indicates that revenue is driven by high-quality cash from TNK’s day-to-day business as opposed to one-off income. TNK’s shares are now trading at a price below its true value based on its PE ratio of 13.07x, compared to the industry and wider stock market ratio, which means it is relatively cheaper than its peers.
TNK’s high dividend payments make it one of the best dividend stocks on the market, and it has also been able to maintain it at a level in which net income is able to cover dividend payments.
For Think Childcare, there are three key aspects you should look at:
- Historical Performance: What has TNK’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.
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TNK? 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.