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Why Fundamental Investors Might Love Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH)

Micheal Lombardo

I’ve been keeping an eye on Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe FPH has a lot to offer. Basically, it is a financially-robust company with a strong history and a excellent growth outlook. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Fisher & Paykel Healthcare here.

Flawless balance sheet with solid track record

FPH delivered a satisfying double-digit returns of 25.0% in the most recent year Unsurprisingly, FPH surpassed the Medical Equipment industry return of 10.5%, which gives us more confidence of the company’s capacity to drive earnings going forward.

NZSE:FPH Future Profit September 17th 18

FPH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. 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 3x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

NZSE:FPH Historical Debt September 17th 18

Next Steps:

For Fisher & Paykel Healthcare, there are three key aspects you should further examine:

  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!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.