Argent Industrial - Cash flush
Argent Industrial (Argent) is primarily a steel-based beneficiation group, bolstered by offshore investments in both existing and new ventures, and by promoting exports. Its strategy of moving away from solely South Africa (SA) to the UK and US has established a solid diversified foundation for sustainable growth locally and internationally. Consequently, there has been a CAGR in headline earnings per share of 33% over the past five years, with 76% of this growth derived from regular business operations and the remainder fuelled by a steady share buyback strategy. Net cash of ZAR403m is equivalent to ZAR7.40 per share, or 35% of the current market value. The stock trades at a P/E of 4.9x (compared to international peers at 8.5x) and offers a dividend yield of 5.4%.Argent Industrial is a holding company. Co.'s operations include steel trading, manufacture of home and office products, automotive products, fabrication and non-steel related products. The steel trading segment involves the trading of steel, stainless steel and aluminum. The home and office segment involves the manufacture of branded products. The automotive segment supplies automotive products. The fabricator segment supplies fabricated products to the construction, mining and industrial markets. The non-steel segment is involved in the supply of quarry stone and ready-mix concrete, railway retarders in North America, and the supply of rubber products.
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