Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on IVE Group Limited (ASX:IGL) due to its excellent fundamentals in more than one area. IGL is a financially-healthy company with a a strong track record of performance, trading at a discount. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, take a look at the report on IVE Group here.
Undervalued with proven track record and pays a dividend
IGL delivered a satisfying double-digit returns of 6.9% in the most recent year Unsurprisingly, IGL surpassed the industry return of 5.1%, which gives us more confidence of the company’s capacity to drive earnings going forward. IGL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that IGL manages its cash and cost levels well, which is an important determinant of the company’s health. IGL appears to have made good use of debt, producing operating cash levels of 0.28x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
IGL’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the media industry, IGL is also trading below its peers, relative to earnings generated. This further reaffirms that IGL is potentially undervalued.
Next Steps:
For IVE Group, I’ve compiled three relevant factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for IGL’s future growth? Take a look at our free research report of analyst consensus for IGL’s outlook.
- Dividend Income vs Capital Gains: Does IGL 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 IGL as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of IGL? 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.