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 Seplat Petroleum Development Company Plc (LON:SEPL), it is a financially-healthy company with a an impressive track record high-quality dividend payments, trading at a great value. 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 Seplat Petroleum Development here.
Flawless balance sheet, undervalued and pays a dividend
SEPL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that SEPL manages its cash and cost levels well, which is an important determinant of the company’s health. SEPL’s has produced operating cash levels of 1.24x total debt over the past year, which implies that SEPL’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. SEPL’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the oil and gas industry, SEPL is also trading below its peers, relative to earnings generated. This bolsters the proposition that SEPL’s price is currently discounted.
SEPL is considered one of the top dividend payers in the market, and it has also been able to maintain it at a level in which net income is able to cover dividend payments.
For Seplat Petroleum Development, there are three relevant factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for SEPL’s future growth? Take a look at our free research report of analyst consensus for SEPL’s outlook.
- Historical Performance: What has SEPL’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SEPL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.