I’ve been keeping an eye on Advanced Micro Devices, Inc. (NASDAQ:AMD) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe AMD has a lot to offer. Basically, it is a financially-healthy company with a strong track record and a excellent future outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Advanced Micro Devices here.
High growth potential with excellent balance sheet
One reason why investors are attracted to AMD is its earnings growth potential in the near future of 58% underlying the notable 39% return on equity over the next few years leading up to 2021. AMD has a strong track record of performance. In the previous year, AMD delivered an impressive double-digit return of 32% Unsurprisingly, AMD surpassed the Semiconductor industry return of 16%, which gives us more confidence of the company’s capacity to drive earnings going forward.
AMD is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that AMD manages its cash and cost levels well, which is a crucial insight into the health of the company. AMD appears to have made good use of debt, producing operating cash levels of 0.26x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For Advanced Micro Devices, I’ve put together three key factors you should look at:
- Valuation: What is AMD 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 AMD is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does AMD 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 AMD as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AMD? 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 editorial-team@simplywallst.com.