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Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of FPH, it is a financially-sound company with a great history and a buoyant future 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 Fisher & Paykel Healthcare here.
Flawless balance sheet with reasonable growth potential
In the previous year, FPH has ramped up its bottom line by 20%, with its latest earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 27%, which paints a buoyant picture for the company.
FPH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that FPH has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. FPH appears to have made good use of debt, producing operating cash levels of 2.7x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For Fisher & Paykel Healthcare, there are three key aspects you should look at:
- Valuation: What is FPH 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 FPH is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does FPH 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 FPH as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FPH? 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.