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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Altarea SCA (EPA:ALTA), it is a financially-robust company with a an impressive track record 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 broad commentary, read the full report on Altarea here.
Good value with adequate balance sheet and pays a dividend
ALTA'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 indicates that ALTA has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. ALTA’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps ALTA expand. ALTA's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. 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. Also, relative to the rest of FR companies with similar levels of earnings, ALTA's share price is trading below the group's average. This supports the theory that ALTA is potentially underpriced.
ALTA's high dividend payments make it one of the best dividend stocks on the market, and its profitability ensures that dividends are well-covered by its net income.
Next Steps:
For Altarea, I've compiled three essential aspects you should look at:
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Future Outlook: What are well-informed industry analysts predicting for ALTA’s future growth? Take a look at our free research report of analyst consensus for ALTA’s outlook.
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Historical Performance: What has ALTA'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.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ALTA? 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.