Yahoo Finance Is Boral Limited (ASX:BLD) Potentially Underrated?
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 Boral Limited (ASX:BLD), it is a financially-healthy company with a a strong history of performance, trading at a discount. 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, take a look at the report on Boral here.
Undervalued with proven track record
BLD delivered a bottom-line expansion of 75% in the prior year, with its most recent earnings level surpassing its average level over the last five years. In addition to beating its historical values, BLD also outperformed its industry, which delivered a growth of 0.9%. This is what investors like to see! BLD is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. BLD appears to have made good use of debt, producing operating cash levels of 0.23x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
BLD’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of BLD’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, BLD’s share price is trading below the group’s average. This supports the theory that BLD is potentially underpriced.
Next Steps:
For Boral, there are three essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for BLD’s future growth? Take a look at our free research report of analyst consensus for BLD’s outlook.
Dividend Income vs Capital Gains: Does BLD 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 BLD as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BLD? 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.
