Yahoo Finance Adams Diversified Equity Fund Inc (NYSE:ADX): A Fundamentally Attractive Investment
Attractive stocks have exceptional fundamentals. In the case of Adams Diversified Equity Fund Inc (NYSE:ADX), there’s is a financially-healthy company with a an impressive track record of performance, trading at a great value. In the following section, I expand a bit more 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 Adams Diversified Equity Fund here.
Undervalued with solid track record and pays a dividend
ADX 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. The strong earnings growth is reflected in impressive double-digit 20.92% return to shareholders, which is what investors like to see! Looking at ADX’s capital structure, the company 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. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
ADX’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if ADX’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the capital markets industry, ADX is also trading below its peers, relative to earnings generated. This further reaffirms that ADX is potentially undervalued.
Next Steps:
For Adams Diversified Equity Fund, I’ve put together three fundamental factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for ADX’s future growth? Take a look at our free research report of analyst consensus for ADX’s outlook.
Dividend Income vs Capital Gains: Does ADX 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 ADX as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ADX? 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 pass 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.
