Why Sanford Limited (NZSE:SAN) Could Have A Place In Your Portfolio
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
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 Sanford Limited (NZSE:SAN), it is a financially-sound company with an impressive track record high-grade dividend payments, trading at a great value. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Sanford here.
Flawless balance sheet, good value and pays a dividend
SAN is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that SAN manages its cash and cost levels well, which is a key determinant of the company’s health. SAN appears to have made good use of debt, producing operating cash levels of 0.36x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. SAN's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if SAN's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the food industry, SAN is also trading below its peers, relative to earnings generated. This supports the theory that SAN is potentially underpriced.
SAN's profit levels are sufficient enough to reinvest and payout as dividends, which has been higher than the low-risk savings rate, sufficiently rewarding shareholders for taking on the risk of investing in the stock market. However, it is important to remember that dividend yields are a function of stock prices and corporate profits, which can be volatile.
Next Steps:
For Sanford, there are three relevant aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for SAN’s future growth? Take a look at our free research report of analyst consensus for SAN’s outlook.
Historical Performance: What has SAN'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 SAN? 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 editorial-team@simplywallst.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.
