In This Article:
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 Sonic Healthcare Limited (ASX:SHL), it is a financially-sound , dividend-paying company with a an impressive track record of performance. 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 Sonic Healthcare here.
Established dividend payer with adequate balance sheet
SHL has a strong track record of performance. In the previous year, SHL delivered an impressive double-digit return of 6.2% Unsurprisingly, SHL surpassed the industry return of 4.3%, which gives us more confidence of the company's capacity to drive earnings going forward. SHL'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 crucial insight into the health of the company. SHL's has produced operating cash levels of 0.29x total debt over the past year, which implies that SHL's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
SHL is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.
Next Steps:
For Sonic Healthcare, I've put together three essential factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for SHL’s future growth? Take a look at our free research report of analyst consensus for SHL’s outlook.
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Valuation: What is SHL 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 SHL is currently mispriced by the market.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SHL? 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.