Medibank Private Limited (ASX:MPL): A Fundamentally Attractive Investment

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Medibank Private Limited (ASX:MPL) due to its excellent fundamentals in more than one area. MPL is a company with great financial health as well as a a great track record of performance. 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, read the full report on Medibank Private here.

Flawless balance sheet with proven track record

Over the past few years, MPL has demonstrated a proven ability to generate robust returns of 24.3% Unsurprisingly, MPL surpassed the Insurance industry return of 15.4%, which gives us more confidence of the company’s capacity to drive earnings going forward. MPL’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that MPL has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. MPL currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is rather impressive for a AU$8.01b market cap company. MPL has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.

ASX:MPL Income Statement Export September 29th 18

Next Steps:

For Medibank Private, I’ve compiled three important aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for MPL’s future growth? Take a look at our free research report of analyst consensus for MPL’s outlook.

2. Valuation: What is MPL 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 MPL is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MPL? 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.