Diploma PLC (LON:DPLM) 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 DPLM, it is a financially-healthy , dividend-paying company with a strong track record of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Diploma here.
Flawless balance sheet with solid track record and pays a dividend
Over the past year, DPLM has grown its earnings by 16%, with its most recent figure exceeding its annual average over the past five years. In addition to beating its historical values, DPLM also outperformed its industry, which delivered a growth of 5.7%. This is what investors like to see! DPLM'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 DPLM has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. Investors should not worry about DPLM’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is rather impressive for a UK£1.9b market 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 DPLM is a great dividend company, with a current yield standing at 1.5%. DPLM has also been regularly increasing its dividend payments to shareholders over the past decade.
For Diploma, I've put together three fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for DPLM’s future growth? Take a look at our free research report of analyst consensus for DPLM’s outlook.
- Valuation: What is DPLM 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 DPLM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DPLM? 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.