Yahoo Finance Should IDP Education Limited (ASX:IEL) Be Your Next Stock Pick?
I’ve been keeping an eye on IDP Education Limited (ASX:IEL) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe IEL has a lot to offer. Basically, it is a financially-robust company with a great history and an optimistic growth outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on IDP Education here.
Reasonable growth potential with proven track record
In the previous year, IEL has ramped up its bottom line by 24%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 51% return to shareholders, which is what investors like to see!
IEL’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that IEL has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. IEL’s has produced operating cash levels of 1.17x total debt over the past year, which implies that IEL’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
Next Steps:
For IDP Education, there are three fundamental aspects you should further research:
Valuation: What is IEL 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 IEL is currently mispriced by the market.
Dividend Income vs Capital Gains: Does IEL 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 IEL as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of IEL? 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.
