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Is Boral Ltd available at a bargain price?

Team Veye | 01 May 2018 ASX - BLD
Is Boral Ltd available at a bargain price?

Boral Ltd (ASX: BLD)

The company declared its H1 FY2018 results on 13th Feb’18 highlighting a strong performance across key metrics. The company declared that its Net Profit after Tax Attributable (NPATA) stood at $237m, up 58% and EBITDA stood at $500m, up 50%. This significant increase in earnings is driven by Headwaters acquisition and Boral Australia. The company’s revenue grew 40% and stood at $2937m.

 

(Graphic Source – Company Reports)

The company had a Net debt of $2.4b at 31 Dec 2017, up from $2.3b at 30 June 2017. The company has a very positive outlook for 2018. On 29th Mar’18, the company announced that it has successfully priced a US$300 million US Private Placement (USPP) senior, unsecured note issue. On 24th Apr’18, the company announced that it has simultaneously exchanged contracts and completed the sale of its Prospect Masonry property to ISPT Pty Ltd. The sale of this property at Clunies Ross Street, Greystanes in New South Wales, is expected to contribute approximately $56 million of EBITDA in FY2018. Boral now expects a total EBITDA contribution from Property in FY2018 of approximately $55 million to $65 million (Data Source – Company Reports).

 

Financials

The company currently offers a decent half- franked annual dividend yield of 3.72% (50% franking) against a sector average of only 2.22%. The P/E ratio is 25.98 against the sector average of 28.63. The company’s EPS stands at 40.14 and EBITDA margin is 13.48. The company has a market cap of 7.73bn and a Share Volume of 1.17bn. The Debt-to-Equity ratio is 46.47 against a sector average of 31.07. The stock price grew 18 % from Nov’17 until 2nd Feb’18 to touch an all-time high of $8.13. After that it slipped 19% and has started recovering again on the back of recent developments around sale and acquisition. The stock surely has an upside potential to go up further (Data Source – Reuters.com).

 

Veye’s Take    

We are Bullish on “Boral Ltd” and give it a “Buy” at the current price of $6.88

Disclaimer

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