Yahoo Finance Brief Commentary On Redrow plc’s (LON:RDW) Fundamentals
Attractive stocks have exceptional fundamentals. In the case of Redrow plc (LON:RDW), there’s is a financially-healthy company with a a strong history of performance, trading at a discount. 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 Redrow here.
Very undervalued with flawless balance sheet and pays a dividend
RDW has a strong track record of performance. In the previous year, RDW delivered an impressive double-digit return of 21% Unsurprisingly, RDW surpassed the Consumer Durables industry return of 16%, which gives us more confidence of the company’s capacity to drive earnings going forward. RDW’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 RDW manages its cash and cost levels well, which is a crucial insight into the health of the company. RDW’s has produced operating cash levels of 7.33x total debt over the past year, which implies that RDW’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
RDW is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. 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 its peers with similar levels of earnings, RDW’s share price is trading below the group’s average. This supports the theory that RDW is potentially underpriced.
Next Steps:
For Redrow, I’ve compiled three pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for RDW’s future growth? Take a look at our free research report of analyst consensus for RDW’s outlook.
Dividend Income vs Capital Gains: Does RDW 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 RDW as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RDW? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
