By Rob Otman
Shaw Communications (NYSE: SJR) is a $12 billion company today. Investors that bought shares one year ago are sitting on a 20.92% total return. That’s above the S&P 500’s return of 17.81%.
Shaw Communications stock is beating the market, and it reports earnings tomorrow. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: Shaw Communications reported a recent EPS growth rate of 25%. That’s below the media industry average of 37.65%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the media industry is 35.76. And Shaw Communications’ ratio comes in at 13.42. It’s trading at a better value than many of its competitors.
✗ Debt-to-Equity: The debt-to-equity ratio for Shaw Communications Stock is 102.45%. That’s above the media industry average of 62.48%. That’s not a good sign. Shaw Communications’ debt levels should be lower.
✓ Free Cash Flow per Share Growth: Shaw Communications’ FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✓ Profit Margins: The profit margin of Shaw Communications comes in at 11.27% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Shaw Communications’ profit margin is above the media average of -1.72%. So that’s a positive indicator for investors.
✓ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Shaw Communications is 20.04%, and that’s above its industry average ROE of 12.51%.
Shaw Communications stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Buy With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more
Source:: Investment You
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