An Examination Of Morses Club PLC (LON:MCL)

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Attractive stocks have exceptional fundamentals. In the case of Morses Club PLC (LON:MCL), there’s is a financially-sound company with a great history and a excellent growth outlook. 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 Morses Club here.

Good value with reasonable growth potential

Over the past year, MCL has grown its earnings by 24%, with its most recent figure exceeding its annual average over the past five years. This strong performance generated a robust double-digit return on equity of 23%, which is what investors like to see!

AIM:MCL Past and Future Earnings, May 8th 2019
AIM:MCL Past and Future Earnings, May 8th 2019

MCL’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 MCL manages its cash and cost levels well, which is an important determinant of the company’s health. MCL seems to have put its debt to good use, generating operating cash levels of 1.45x 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.

AIM:MCL Historical Debt, May 8th 2019
AIM:MCL Historical Debt, May 8th 2019

Next Steps:

For Morses Club, there are three relevant aspects you should further examine:

  1. Valuation: What is MCL 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 MCL is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does MCL 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 MCL as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MCL? 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.