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Eland Oil & Gas PLC (LON:ELA) 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 ELA, it is a financially-sound company with a great track record and an optimistic growth outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Eland Oil & Gas here.
Outstanding track record with excellent balance sheet
Bullish market analysts are forecasting fast-growing ELA to deliver an exceptional triple-digit sales growth rate over the next year. This is expected to flow down into an impressive return on equity of 31% over the next couple of years. In the past couple of years, ELA has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 47%, which is what investors like to see!
ELA’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 an important determinant of the company’s health. ELA’s has produced operating cash levels of 0.95x total debt over the past year, which implies that ELA’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Eland Oil & Gas, I’ve put together three important aspects you should further research:
- Valuation: What is ELA 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 ELA is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does ELA 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 ELA as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ELA? 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.