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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 Scapa Group plc (LON:SCPA), it is a company with robust financial health as well as a excellent future outlook. 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 Scapa Group here.
Flawless balance sheet with reasonable growth potential
SCPA is an attractive stock for growth-seeking investors, with an expected earnings growth of 23% in the upcoming year, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to more than double over the next year. This indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. SCPA’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 suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. SCPA seems to have put its debt to good use, generating operating cash levels of 1.27x 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 Scapa Group, I’ve put together three relevant aspects you should further examine:
- Historical Performance: What has SCPA’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.
- Valuation: What is SCPA 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 SCPA is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SCPA? 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.
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