Should Koenig & Bauer AG (FRA:SKB) Be Your Next Stock Pick?

I’ve been keeping an eye on Koenig & Bauer AG (FRA:SKB) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe SKB has a lot to offer. Basically, it is a financially-sound company with a an impressive track record high-grade dividend payments, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Koenig & Bauer here.

Excellent balance sheet established dividend payer

SKB’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that SKB has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. SKB appears to have made good use of debt, producing operating cash levels of 2.01x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. SKB is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if SKB’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the machinery industry, SKB is also trading below its peers, relative to earnings generated. This supports the theory that SKB is potentially underpriced.

DB:SKB Intrinsic Value Export January 10th 19

Income investors would also be happy to know that SKB is a great dividend company, with a current yield standing at 2.3%. SKB has also been regularly increasing its dividend payments to shareholders over the past decade.

DB:SKB Historical Dividend Yield January 10th 19

Next Steps:

For Koenig & Bauer, there are three pertinent factors you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for SKB’s future growth? Take a look at our free research report of analyst consensus for SKB’s outlook.

2. Historical Performance: What has SKB’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.

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