Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Crompton Greaves Consumer Electricals Limited (NSE:CROMPTON) due to its excellent fundamentals in more than one area. CROMPTON is a financially-robust company with an impressive track record and a excellent growth outlook. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my high-level commentary, read the full report on Crompton Greaves Consumer Electricals here.
Reasonable growth potential with proven track record
Investors seeking high cash growth potential should consider CROMPTON, with forecasted operating cash flow growth of 72.9%. This underlies the notable 42.8% return on equity over the next few years leading up to 2021. Over the past few years, CROMPTON has demonstrated a proven ability to generate robust returns of 44.1% Unsurprisingly, CROMPTON surpassed the Consumer Durables industry return of 13.1%, which gives us more confidence of the company’s capacity to drive earnings going forward.
CROMPTON’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 indicates that CROMPTON has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. CROMPTON seems to have put its debt to good use, generating operating cash levels of 0.49x 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.
For Crompton Greaves Consumer Electricals, I’ve compiled three fundamental factors you should further research:
- Valuation: What is CROMPTON 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 CROMPTON is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does CROMPTON 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 CROMPTON as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CROMPTON? 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 firstname.lastname@example.org.