ASR Nederland NV is a financially healthy and robust stock with a proven track record of outperformance. We all know ASR Nederland, and having this large-cap to cushion your portfolio during a volatile period in the stock market isn’t a bad idea. Today I will give a high-level overview of the stock, and why I believe it’s still attractive.
See our latest analysis for ASR Nederland
ASR Nederland N.V. provides various insurance and non-insurance products and services to private and business customers in the Netherlands and internationally. With the company’s market capitalisation at €5.8b, we can put it in the mid-cap category Volatility in the market is hardly detrimental to the financial health and business operations of a large, well-established company. Although some monetary and fiscal policy changes may impact some corporate financing decisions and strategy, what we’ve learnt over time is that these companies tend to adapt. And having a strong balance sheet and a history of proven success aids in this adaptability.
Currently ASR Nederland has €3.4b on its balance sheet, which requires regular interest payments. This requires the business to have enough cash to meet these upcoming interest expenses. ASR Nederland generates enough earnings to cover its interest payments, more specifically, its interest coverage ratio (EBIT/interest) is 8.55x, which is well-above the minimum requirement of 3x. Furthermore, its operating cash flows amply covers its total debt by 36%, above the safe minimum of 20%. And, a given, its liquidity ratio holds up well with cash and other liquid assets exceeding upcoming liabilities, meaning ASRNL’s financial strength will continue to let it thrive in a fickle market.
ASRNL’s year-on-year earnings growth has been positive over the past five years, with an average annual growth rate of 23%, overtaking the industry growth rate of 3.7%. It has also returned an ROE of 16% recently, above the industry return of 10%. ASR Nederland’s strong performance over time is a demonstration of its ability to grow through cycles, raising my confidence in the company as a long-term investment.
Next Steps:
ASR Nederland makes for a robust long-term investment based on its scale, financial health and track record. Remember, in bear markets, sell-offs can be unjustified. Ask yourself, has anything really changed with ASR Nederland? If not, then why not scoop it up at a discount? Lining your portfolio with a few well-established companies can reduce your risk and help you scale your wealth in the long run. One thing you should remember though, is to do your homework. Do your own research, come up with your point of view. Below is a list I’ve put together of other things you should consider before you buy:- Future Outlook: What are well-informed industry analysts predicting for ASRNL’s future growth? Take a look at our free research report of analyst consensus for ASRNL’s outlook.
- Valuation: What is ASRNL 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 ASRNL is currently mispriced by the market.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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.