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Attractive stocks have exceptional fundamentals. In the case of B&M European Value Retail S.A. (LON:BME), there's is a financially-sound company with a great history and a excellent growth outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the full report on B&M European Value Retail here.
Excellent balance sheet with proven track record
BME’s cash-generating ability is outstanding, with analysts expecting its operating cash flows to flourish by 55% in the upcoming year. This is expected to flow down into an impressive return on equity of 28% over the next couple of years. BME has a strong track record of performance. In the previous year, BME delivered an impressive double-digit return of 9.8% Unsurprisingly, BME surpassed the industry return of 7.6%, which gives us more confidence of the company's capacity to drive earnings going forward.
BME's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. BME's has produced operating cash levels of 0.3x total debt over the past year, which implies that BME's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For B&M European Value Retail, I've put together three key factors you should further examine:
- Valuation: What is BME 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 BME is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does BME 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 BME as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BME? 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.