A Spotlight On Brickworks Limited’s (ASX:BKW) Fundamentals

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Brickworks Limited (ASX:BKW) 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 BKW, it is a financially-sound , dividend-paying company with a a great history of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Brickworks here.

Flawless balance sheet with solid track record and pays a dividend

BKW delivered a bottom-line expansion of 25% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did BKW outperformed its past performance, its growth also surpassed the Basic Materials industry expansion, which generated a 13% earnings growth. This is an notable feat for the company. BKW’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that BKW has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. BKW appears to have made good use of debt, producing operating cash levels of 0.48x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

ASX:BKW Income Statement, May 25th 2019
ASX:BKW Income Statement, May 25th 2019

Income investors would also be happy to know that BKW is a great dividend company, with a current yield standing at 3.2%. BKW has also been regularly increasing its dividend payments to shareholders over the past decade.

ASX:BKW Historical Dividend Yield, May 25th 2019
ASX:BKW Historical Dividend Yield, May 25th 2019

Next Steps:

For Brickworks, there are three fundamental aspects you should further research:

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