Yahoo Finance Why Fundamental Investors Love Legend Corporation Limited (ASX:LGD)
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Legend Corporation Limited (ASX:LGD) due to its excellent fundamentals in more than one area. LGD is a financially-sound company with a a strong track record high-grade dividend payments, trading at a discount. 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 Legend here.
Flawless balance sheet, undervalued and pays a dividend
LGD’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 an important determinant of the company’s health. LGD seems to have put its debt to good use, generating operating cash levels of 0.63x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. LGD’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the trade distributors industry, LGD is also trading below its peers, relative to earnings generated. This supports the theory that LGD is potentially underpriced.
LGD’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 5.83%.
Next Steps:
For Legend, I’ve compiled three important factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for LGD’s future growth? Take a look at our free research report of analyst consensus for LGD’s outlook.
Historical Performance: What has LGD’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 LGD? 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.
