I’ve been keeping an eye on Harvey Norman Holdings Limited (ASX:HVN) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe HVN has a lot to offer. Basically, it is a financially-sound company with a an impressive history high-quality dividend payments, trading at a discount. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, take a look at the report on Harvey Norman Holdings here.
Flawless balance sheet established dividend payer
HVN is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that HVN has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. HVN’s has produced operating cash levels of 0.48x total debt over the past year, which implies that HVN’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. HVN’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 HVN’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the multiline retail industry, HVN is also trading below its peers, relative to earnings generated. This supports the theory that HVN is potentially underpriced.
Income investors would also be happy to know that HVN is one of the highest dividend payers in the market, with current dividend yield standing at 7.10%. HVN has also been regularly increasing its dividend payments to shareholders over the past decade.
For Harvey Norman Holdings, I’ve compiled three key aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for HVN’s future growth? Take a look at our free research report of analyst consensus for HVN’s outlook.
- Historical Performance: What has HVN’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HVN? 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.