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A Holistic Look At IPH Limited (ASX:IPH)

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of IPH Limited (ASX:IPH), there's is a financially-sound company with an impressive history and a buoyant future outlook. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at the report on IPH here.

Flawless balance sheet with reasonable growth potential

Investors in search of impressive top-line expansion should look no further than IPH, with its expected 63% revenue growth in the upcoming year. This underlies the notable 24% return on equity over the next few years leading up to 2022. IPH delivered a bottom-line expansion of 31% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did IPH outperformed its past performance, its growth also surpassed the Professional Services industry expansion, which generated a 27% earnings growth. This is an optimistic signal for the future.

ASX:IPH Past and Future Earnings, September 23rd 2019

IPH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that IPH has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. IPH appears to have made good use of debt, producing operating cash levels of 0.94x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

ASX:IPH Historical Debt, September 23rd 2019

Next Steps:

For IPH, there are three essential aspects you should look at:

  1. Valuation: What is IPH 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 IPH is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does IPH 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 IPH as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of IPH? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.