By Rob Otman
Nomad Foods (NYSE: NOMD) is a mid cap company that operates within the food products industry. Its market cap is $3 billion today and the total one-year return is 44.96% for shareholders.
Nomad Foods stock is beating the market, and it reports earnings soon. 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: Nomad Foods reported a recent EPS growth rate of 1100%. That’s above the food products industry average of 37.06%. That’s a great sign. Nomad Foods’ earnings growth is outpacing competitors.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the food products industry is 136.63. And Nomad Foods’ ratio comes in at 22.36. It’s trading at a better value than many of its competitors.
✗ Debt-to-Equity: The debt-to-equity ratio for Nomad Foods stock is 77.41%. That’s above the food products industry average of 43.10%. That’s not a good sign.
✗ Free Cash Flow per Share Growth: Nomad Foods has decreased its FCF per share over the last year relative to its competitors. That’s not 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.
✓ Profit Margins: The profit margin of Nomad Foods comes in at 9.13% today. And generally, the higher, the better. We also like to see this ratio above competitors. Nomad Foods’ profit margin is above the food products average of 5.28%. 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 Nomad Foods is 5.77% and that’s below the industry average ROE of 13.15%.
Nomad Foods stock passes three of our six key metrics today. That’s why our Investment U Stock Grader gives it a Hold.
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.
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Source:: Investment You
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