Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on MTU Aero Engines AG (ETR:MTX) due to its excellent fundamentals in more than one area. MTX is a financially-robust , dividend-paying company with an impressive track record of performance. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, take a look at the report on MTU Aero Engines here.
Flawless balance sheet with solid track record and pays a dividend
MTX delivered a bottom-line expansion of 31% in the prior year, with its most recent 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 21%. which is what investors like to see! MTX'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 MTX manages its cash and cost levels well, which is a crucial insight into the health of the company. Investors should not worry about MTX’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is rather impressive for a €12b market cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For those seeking income streams from their portfolio, MTX is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 1.3%.
For MTU Aero Engines, I've put together three pertinent factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for MTX’s future growth? Take a look at our free research report of analyst consensus for MTX’s outlook.
- Valuation: What is MTX 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 MTX is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MTX? 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 firstname.lastname@example.org. 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.