NASDAQ:ESLT
$64.60
(3/19 9:30AM)
-0.2%
| Open | $64.6 |
Mkt Cap | $2.8 Billion |
| High | $64.6 |
52Wk High | $70.69 |
| Low | $64.6 |
52Wk Low | $43.40 |
| Volume | 568 |
Avg Vol 10D | 29,200 |
Ockham's Rating/Recommendation Summary
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ESLT Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at ESLT through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 1.24x and 0.77x respectively.
Utilizing this range we can see that ESLT’s current Price to Sales per share ratio of 0.94x is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that ESLT does look a bit undervalued on a Price to Sales basis, all other factors being equal. However, if the Price to Sales ratio drops further, Ockham Research is likely to become more bullish on this stock.
ESLT Cash Earnings
Looking at ESLT specifically in their Cash Earnings capabilities, Ockham views ESLT as significantly below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from ESLT. For example, ESLT's Cash Earnings ratio per share has fluctuated between 7.71 and 12.37 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where ESLT is with respect to prior business periods.
So with ESLT's current price (latest close of $62.56) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, ESLT is 22% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with ESLT.
ESLT Dividends
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.
When reviewing dividend yields for ESLT, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. ESLT’s estimated annual dividend is $1.44 resulting in a current dividend yield of 2.30%. The highest dividend yield from ESLT over recent history was 4.55% while the lowest dividend yield was 1.07%. With that range in mind, ESLT’s current dividend yield is a full 18.15% below its median dividend yield historically. This is a negative from our perspective.
