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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Aarti Industries Limited (NSE:AARTIIND) due to its excellent fundamentals in more than one area. AARTIIND is a financially-healthy company with an impressive track record and a excellent future outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on Aarti Industries here.
High growth potential with proven track record
Investors in search for stocks with room to flourish should look no further than AARTIIND, with its expected earnings growth of 21% underlying the notable 21% return on equity over the next few years leading up to 2022. AARTIIND delivered a bottom-line expansion of 45% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did AARTIIND outperformed its past performance, its growth also surpassed the Chemicals industry expansion, which generated a 16% earnings growth. This is an notable feat for the company.
AARTIIND's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that AARTIIND has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. Debt funding requires timely payments on interest to lenders. AARTIIND’s earnings sufficiently covered its interest in the prior year, which indicates there’s low risk associated with the company not being able to meet these key expenses.
Next Steps:
For Aarti Industries, I've compiled three essential aspects you should further examine:
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Valuation: What is AARTIIND 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 AARTIIND is currently mispriced by the market.
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Dividend Income vs Capital Gains: Does AARTIIND 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 AARTIIND as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AARTIIND? 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.