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1300SMILES Limited (ASX:ONT) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of ONT, it is a financially-sound company with a an impressive history of dividend payments and a buoyant future outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on 1300SMILES here.
Excellent balance sheet with reasonable growth potential and pays a dividend
ONT’s cash-generating ability is outstanding, with analysts expecting its operating cash flows to flourish by 59% in the upcoming year. This underlies the notable 21% return on equity over the next few years leading up to 2022. ONT'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 implies that ONT manages its cash and cost levels well, which is an important determinant of the company’s health. ONT appears to have made good use of debt, producing operating cash levels of 1.92x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
ONT 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 1300SMILES, I've put together three important factors you should look at:
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Historical Performance: What has ONT'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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Valuation: What is ONT 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 ONT 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 ONT? 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.