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A Holistic Look At Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH)

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 Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH), it is a financially-robust company with a great track record and an optimistic future 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 Fisher & Paykel Healthcare here.

Flawless balance sheet with reasonable growth potential

In the previous year, FPH has ramped up its bottom line by 20%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 27%. which is what investors like to see!

NZSE:FPH Past and Future Earnings, March 8th 2019
NZSE:FPH Past and Future Earnings, March 8th 2019

FPH’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 implies that FPH manages its cash and cost levels well, which is an important determinant of the company’s health. FPH appears to have made good use of debt, producing operating cash levels of 2.7x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

NZSE:FPH Historical Debt, March 8th 2019
NZSE:FPH Historical Debt, March 8th 2019

Next Steps:

For Fisher & Paykel Healthcare, there are three essential factors you should look at:

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  1. Valuation: What is FPH 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 FPH is currently mispriced by the market.

  2. Dividend Income vs Capital Gains: Does FPH 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 FPH as an investment.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FPH? 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.