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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 Deluxe Corporation (NYSE:DLX), it is a financially-healthy company with a a great history high-quality dividend payments, trading at a discount. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Deluxe here.
Undervalued with adequate balance sheet and pays a dividend
DLX is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that DLX has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. DLX appears to have made good use of debt, producing operating cash levels of 0.32x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. DLX is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of DLX’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, DLX’s share price is trading below the group’s average. This bolsters the proposition that DLX’s price is currently discounted.
For those seeking income streams from their portfolio, DLX is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 2.9%.
For Deluxe, there are three fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for DLX’s future growth? Take a look at our free research report of analyst consensus for DLX’s outlook.
- Historical Performance: What has DLX’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 DLX? 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 firstname.lastname@example.org. 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.