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Macy’s, Inc. (NYSE:M) 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 M, it is a financially-sound company with a a strong history of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Macy’s here.
6 star dividend payer and undervalued
M delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 30%, which is an optimistic signal for the future. M’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that M has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. M’s has produced operating cash levels of 0.36x total debt over the past year, which implies that M’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
M is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, M’s share price is trading below the group’s average. This further reaffirms that M is potentially undervalued.
For Macy’s, I’ve put together three key aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for M’s future growth? Take a look at our free research report of analyst consensus for M’s outlook.
- Dividend Income vs Capital Gains: Does M 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 M as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of M? 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 firstname.lastname@example.org.