Is Marshalls plc (LON:MSLH) Potentially Underrated?

Marshalls plc (LON:MSLH) 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 MSLH, it is a well-regarded dividend payer that has been able to sustain great financial health over the past. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Marshalls here.

Flawless balance sheet average dividend payer

MSLH’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 MSLH manages its cash and cost levels well, which is a crucial insight into the health of the company. MSLH’s has produced operating cash levels of 0.75x total debt over the past year, which implies that MSLH’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

LSE:MSLH Historical Debt January 27th 19
LSE:MSLH Historical Debt January 27th 19

MSLH’s profit levels are sufficient enough to reinvest and payout as dividends, which has been higher than the low-risk savings rate, compensating investors for taking the risk of holding a stock as opposed to riskless assets. However, it is important to remember that dividend yields are a function of stock prices and corporate profits, which can be volatile.

LSE:MSLH Historical Dividend Yield January 27th 19
LSE:MSLH Historical Dividend Yield January 27th 19

Next Steps:

For Marshalls, I’ve put together three essential aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for MSLH’s future growth? Take a look at our free research report of analyst consensus for MSLH’s outlook.
  2. Historical Performance: What has MSLH’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.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MSLH? 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 editorial-team@simplywallst.com.