Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Spirent Communications plc (LON:SPT) due to its excellent fundamentals in more than one area. SPT is a financially-robust , dividend-paying company with a a great history of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Spirent Communications here.
Flawless balance sheet with proven track record and pays a dividend
Over the past year, SPT has grown its earnings by 92%, with its most recent figure exceeding its annual average over the past five years. Not only did SPT outperformed its past performance, its growth also surpassed the Communications industry expansion, which generated a 32% earnings growth. This is an optimistic signal for the future. SPT’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that SPT manages its cash and cost levels well, which is a crucial insight into the health of the company. Investors should not worry about SPT’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is typically normal for a small-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.
Income investors would also be happy to know that SPT is a great dividend company, with a current yield standing at 2.3%. SPT has also been regularly increasing its dividend payments to shareholders over the past decade.
For Spirent Communications, there are three fundamental factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for SPT’s future growth? Take a look at our free research report of analyst consensus for SPT’s outlook.
- Valuation: What is SPT 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 SPT is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SPT? 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.
Discounted cash flow calculation for every stock
Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.