WD-40 Company (NASDAQ:WDFC) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of WDFC, it is a company with great financial health as well as a an impressive history of performance. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, read the full report on WD-40 here.
Outstanding track record with adequate balance sheet
Over the past year, WDFC has grown its earnings by 19%, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 45% return to shareholders, which paints a buoyant picture for the company. WDFC'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 WDFC has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. WDFC's has produced operating cash levels of 0.62x total debt over the past year, which implies that WDFC's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For WD-40, there are three essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for WDFC’s future growth? Take a look at our free research report of analyst consensus for WDFC’s outlook.
- Valuation: What is WDFC 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 WDFC is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of WDFC? 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 email@example.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.