Yahoo Finance Should Commercial Metals Company (NYSE:CMC) Be Your Next Stock Pick?
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 Commercial Metals Company (NYSE:CMC), it is a financially-healthy company with a an impressive history of dividend payments and an optimistic growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Commercial Metals here.
Reasonable growth potential with adequate balance sheet and pays a dividend
One reason why investors are attracted to CMC is its earnings growth potential in the near future of 21%, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to more than double over the next year. This indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. CMC’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that CMC has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. CMC’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps CMC expand.
CMC’s profit levels are sufficient enough to reinvest and payout as dividends, which has been consistently higher than the low-risk savings rate, sufficiently rewarding shareholders for taking on the risk of investing in the stock market.
Next Steps:
For Commercial Metals, there are three relevant factors you should further research:
Historical Performance: What has CMC’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.
Valuation: What is CMC 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 CMC is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CMC? 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.
