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 Greif, Inc. (NYSE:GEF), it is a financially-sound company with a an impressive history high-grade dividend payments, trading at a discount. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Greif here.
Very undervalued established dividend payer
GEF is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. GEF seems to have put its debt to good use, generating operating cash levels of 0.26x 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. GEF is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if GEF's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the packaging industry, GEF is also trading below its peers, relative to earnings generated. This supports the theory that GEF is potentially underpriced.
Income investors would also be happy to know that GEF is one of the highest dividend payers in the market, with current dividend yield standing at 4.6%. GEF has also been regularly increasing its dividend payments to shareholders over the past decade.
For Greif, I've compiled three key factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for GEF’s future growth? Take a look at our free research report of analyst consensus for GEF’s outlook.
- Historical Performance: What has GEF'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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of GEF? 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.