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International Petroleum Corporation (TSE:IPCO) 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 IPCO, it is a financially-healthy company with a an impressive track record of performance, trading at a discount. 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, take a look at the report on International Petroleum here.
Solid track record and good value
In the past couple of years, IPCO has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. Not only did IPCO outperformed its past performance, its growth also exceeded the Oil and Gas industry expansion, which generated a 15% earnings growth. This is an optimistic signal for the future. IPCO’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. IPCO appears to have made good use of debt, producing operating cash levels of 0.89x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
IPCO is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of IPCO’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the oil and gas industry, IPCO is also trading below its peers, relative to earnings generated. This further reaffirms that IPCO is potentially undervalued.
For International Petroleum, I’ve compiled three essential factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for IPCO’s future growth? Take a look at our free research report of analyst consensus for IPCO’s outlook.
- Dividend Income vs Capital Gains: Does IPCO 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 IPCO as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of IPCO? 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 firstname.lastname@example.org. 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.