Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on San Juan Basin Royalty Trust (NYSE:SJT) due to its excellent fundamentals in more than one area. SJT is a company with great financial health as well as a a strong track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on San Juan Basin Royalty Trust here.
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Flawless balance sheet with proven track record
SJT delivered a bottom-line expansion of 83.40% in the prior year, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in extraordinary returns, with net income levels more than double that of the company's equity levels, which is what investors like to see! SJT'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 indicates that SJT has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. SJT currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
NYSE:SJT Income Statement July 3rd 18
Next Steps:
For San Juan Basin Royalty Trust, there are three relevant factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for SJT’s future growth? Take a look at our free research report of analyst consensus for SJT’s outlook.
Valuation: What is SJT 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 SJT is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SJT? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
