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Water Intelligence plc (LON:WATR) 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 WATR, it is a financially-healthy company with a strong track record and a buoyant future outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Water Intelligence here.
Flawless balance sheet with reasonable growth potential
Investors in search for stocks with room to flourish should look no further than WATR, with its expected earinngs growth of 25%, bolstered by its outstanding cash-generating ability, as analysts predict its operating cash flows will more than double over the same time period. This is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. In the past couple of years, WATR 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 WATR outperformed its past performance, its growth also exceeded the Commercial Services industry expansion, which generated a 0.8% earnings growth. This is what investors like to see!
WATR’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 implies that WATR manages its cash and cost levels well, which is an important determinant of the company’s health. WATR seems to have put its debt to good use, generating operating cash levels of 0.3x 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 Water Intelligence, I’ve put together three fundamental factors you should further examine:
- Valuation: What is WATR 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 WATR is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does WATR 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 WATR as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of WATR? 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. On rare occasion, data errors may occur. Thank you for reading.