These Fundamentals Make CSL Limited (ASX:CSL) Truly Worth Looking At

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 CSL Limited (ASX:CSL), it is a financially-healthy 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 CSL here.

Solid track record with reasonable growth potential

Over the past year, CSL has grown its earnings by 29%, with its most recent figure exceeding its annual average over the past five years. This strong performance generated a robust double-digit return on equity of 42%, which is what investors like to see!

ASX:CSL Future Profit December 25th 18

CSL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. CSL appears to have made good use of debt, producing operating cash levels of 0.43x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

ASX:CSL Historical Debt December 25th 18

Next Steps:

For CSL, there are three key aspects you should further examine:

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

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

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