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Reliance Worldwide Corporation Limited (ASX:RWC) Has Attractive Fundamentals, Here’s Why

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Reliance Worldwide Corporation Limited (ASX:RWC) due to its excellent fundamentals in more than one area. RWC is a financially-healthy company with a strong track record and a buoyant future outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on Reliance Worldwide here.

Outstanding track record with high growth potential

RWC is expected to churn out cash in the short term, with its operating cash flow predicted to expand at a triple-digit growth rate. This underlies the notable 33.86% return on equity over the next few years leading up to 2021. Over the past few years, RWC has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. This illustrates a strong track record, leading to a satisfying return on equity of 31.22%, which is what investors like to see!

ASX:RWC Future Profit June 24th 18
ASX:RWC Future Profit June 24th 18

RWC 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. RWC’s has produced operating cash levels of 0.21x total debt over the past year, which implies that RWC’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

ASX:RWC Historical Debt June 24th 18
ASX:RWC Historical Debt June 24th 18

Next Steps:

For Reliance Worldwide, there are three fundamental factors you should look at:

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  1. Valuation: What is RWC 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 RWC is currently mispriced by the market.

  2. Dividend Income vs Capital Gains: Does RWC 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 RWC as an investment.

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