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I've been keeping an eye on Dhampur Sugar Mills Limited (NSE:DHAMPURSUG) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe DHAMPURSUG has a lot to offer. Basically, it is a financially-robust company with a a strong track record of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Dhampur Sugar Mills here.
Excellent balance sheet with solid track record and pays a dividend
In the previous year, DHAMPURSUG has ramped up its bottom line by 65%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, DHAMPURSUG also outperformed its industry, which delivered a growth of 14%. This is what investors like to see! DHAMPURSUG is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that DHAMPURSUG has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. DHAMPURSUG's has produced operating cash levels of 0.48x total debt over the past year, which implies that DHAMPURSUG's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
DHAMPURSUG is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of DHAMPURSUG's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the food industry, DHAMPURSUG is also trading below its peers, relative to earnings generated. This further reaffirms that DHAMPURSUG is potentially undervalued.
Next Steps:
For Dhampur Sugar Mills, there are three key factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for DHAMPURSUG’s future growth? Take a look at our free research report of analyst consensus for DHAMPURSUG’s outlook.
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Dividend Income vs Capital Gains: Does DHAMPURSUG 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 DHAMPURSUG as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DHAMPURSUG? 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.