Enerflex Ltd (TSE:EFX) Has Attractive Fundamentals, Here’s Why

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Enerflex Ltd (TSX:EFX) due to its excellent fundamentals in more than one area. EFX is a financially-healthy company with a a buoyant growth outlook, not yet reflected in the share price. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Enerflex here.

Excellent balance sheet and good value

EFX’s share price is trading below its true value according to its price-to-equity ratio of 14.9x compared to its industry as well as the wider stock market, so potential investors can purchase the stock below its value.

TSX:EFX Future Profit Jun 15th 18

EFX’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 EFX has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. EFX’s has produced operating cash levels of 0.46x total debt over the past year, which implies that EFX’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

TSX:EFX Historical Debt Jun 15th 18

Next Steps:

For Enerflex, there are three relevant aspects you should further research:

1. Historical Performance: What has EFX’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.

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

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