Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Admiral Group plc (LON:ADM) due to its excellent fundamentals in more than one area. ADM is a financially-healthy , dividend-paying company with an impressive track record of performance. 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 Admiral Group here.
Solid track record with adequate balance sheet and pays a dividend
In the previous year, ADM has ramped up its bottom line by 15%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 48%. which is an optimistic signal for the future. ADM'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 ADM manages its cash and cost levels well, which is an important determinant of the company’s health. ADM appears to have made good use of debt, producing operating cash levels of 0.96x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Income investors would also be happy to know that ADM is one of the highest dividend payers in the market, with current dividend yield standing at 6.0%. ADM has also been regularly increasing its dividend payments to shareholders over the past decade.
For Admiral Group, I've compiled three important aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for ADM’s future growth? Take a look at our free research report of analyst consensus for ADM’s outlook.
- Valuation: What is ADM 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 ADM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ADM? 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 email@example.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.