Should You Be Holding Future PLC (LON:FUTR)?

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Future PLC (LON:FUTR) due to its excellent fundamentals in more than one area. FUTR is a financially-sound company with a great track record and a excellent future outlook. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Future here.

Excellent balance sheet with reasonable growth potential

Investors in search for stocks with room to flourish should look no further than FUTR, with its expected earinngs growth of 62%, bolstered by its outstanding cash-generating ability, as analysts predict its operating cash flows will more than double over the same time period. This is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. Over the past year, FUTR has grown its earnings by 81%, with its most recent figure exceeding its annual average over the past five years. Not only did FUTR outperformed its past performance, its growth also surpassed the Media industry expansion, which generated a 11% earnings growth. This paints a buoyant picture for the company.

LSE:FUTR Future Profit January 14th 19

With a debt-to-equity ratio of 14%, FUTR’s debt level is reasonable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future. FUTR seems to have put its debt to good use, generating operating cash levels of 0.4x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

LSE:FUTR Historical Debt January 14th 19

Next Steps:

For Future, I’ve put together three important aspects you should further research:

1. Valuation: What is FUTR 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 FUTR is currently mispriced by the market.

2. Dividend Income vs Capital Gains: Does FUTR 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 FUTR as an investment.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FUTR? 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.