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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of STMicroelectronics N.V. (EPA:STM), it is a company with great financial health as well as a an impressive history of performance. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, take a look at the report on STMicroelectronics here.
Excellent balance sheet with proven track record
STM has a strong track record of performance. In the previous year, STM delivered an impressive double-digit return of 11% Unsurprisingly, STM surpassed the industry return of 5.6%, which gives us more confidence of the company’s capacity to drive earnings going forward. STM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that STM has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. STM seems to have put its debt to good use, generating operating cash levels of 0.79x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For STMicroelectronics, there are three fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for STM’s future growth? Take a look at our free research report of analyst consensus for STM’s outlook.
- Valuation: What is STM 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 STM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of STM? 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 email@example.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.