Yahoo Finance Why Fundamental Investors Might Love Bellway p.l.c. (LON:BWY)
As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Bellway p.l.c. (LON:BWY), it is a financially-robust company with a great history of performance, trading at a discount. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Bellway here.
Flawless balance sheet, good value and pays a dividend
BWY has a strong track record of performance. In the previous year, BWY delivered an impressive double-digit return of 20%. Unsurprisingly, BWY surpassed the Consumer Durables industry return of 16%, which gives us more confidence of the company's capacity to drive earnings going forward. BWY is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. BWY seems to have put its debt to good use, generating operating cash levels of 4.79x 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.
BWY's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. 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, BWY's share price is trading below the group's average. This bolsters the proposition that BWY's price is currently discounted.
Next Steps:
For Bellway, I've put together three fundamental factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for BWY’s future growth? Take a look at our free research report of analyst consensus for BWY’s outlook.
Dividend Income vs Capital Gains: Does BWY 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 BWY as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BWY? 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 editorial-team@simplywallst.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.
