Yahoo Finance A Spotlight On IDP Education Limited's (ASX:IEL) Fundamentals
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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 strong track record and a excellent growth outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on IDP Education here.
High growth potential with solid track record
One reason why investors are attracted to IEL is its earnings growth potential in the near future of 21% which is expected to flow into an impressive return on equity of 75% over the next couple of years. IEL delivered a bottom-line expansion of 29% in the prior year, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 39% return to shareholders, which is what investors like to see!
IEL's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. IEL appears to have made good use of debt, producing operating cash levels of 1.3x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For IDP Education, there are three key aspects you should further examine:
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!
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.
