Fact based stock research
Cathay Financial (TSEC:2882)

TW0002882008

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Cathay Financial stock research in summary

cathayholdings.com

ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Cathay Financial (Life & Health Insurance, Taiwan) shares have above-average financial characteristics compared with similar stocks. Shares of Cathay Financial are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives). But they show above-average growth (Growth Rank of 95) and are safely financed (Safety Rank of 52, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Cathay Financial's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Cathay Financial exhibits low value (Obermatt Value Rank of 33), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 95). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 52) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	33
Growth Rank	95
Safety Rank	52
Combined Rank	67

Country	Taiwan
Industry	Life & Health Insurance
Index	FTSE Taiwan
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Cathay Financial

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	98	47	44	33
GROWTH
GROWTH	55	90	53	95
SAFETY
SAFETY	94	52	52	52
SENTIMENT
SENTIMENT	n/a	77	48	^new
360° VIEW
360° VIEW	n/a	89	8	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Cathay Financial is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	98	47	44	33
GROWTH
GROWTH	55	90	53	95
SAFETY
SAFETY	94	52	52	52
COMBINED
COMBINED	97	67	67	67

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Cathay Financial the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Cathay Financial shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Cathay Financial. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 57% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 36 which means that the stock price compared with what market professionals expect for future profits is higher than 64% of comparable companies, indicating a low value concerning Cathay Financial's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 45 which means that the stock price compared with what market professionals expect for future profit levels is higher than 55% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 38 is also low. Compared with invested capital, the stock price is higher than for 62% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Cathay Financial's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Cathay Financial? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Cathay Financial only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	73	48	51	36
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	79	62	61	45
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	71	39	39	38
DIVIDEND YIELD
DIVIDEND YIELD	72	62	43	57
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	98	47	44	33

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cathay Financial; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2022, Cathay Financial shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Cathay Financial. Profit Growth has a rank of 98 which means that currently professionals expect the company to grow its profits more than 98% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 91, and Stock Returns has a rank of 89 which means that the stock returns have recently been above 89% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 22 (78% of its competitors are better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	22	4	93	22
PROFIT GROWTH
PROFIT GROWTH	62	87	89	98
CAPITAL GROWTH
CAPITAL GROWTH	n/a	73	1	91
STOCK RETURNS
STOCK RETURNS	90	99	41	89
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	55	90	53	95

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cathay Financial.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Cathay Financial has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Cathay Financial is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Cathay Financial and the other two below average. Refinancing is at 92, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 92% of its competitors. But Leverage is high with a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Liquidity is also on the riskier side with a rank of 35, meaning the company generates less profit to service its debt than 65% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Cathay Financial has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Cathay Financial are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Cathay Financial and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	98	73	42	48
REFINANCING
REFINANCING	67	92	92	92
LIQUIDITY
LIQUIDITY	100	29	4	35
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	94	52	52	52

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cathay Financial and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	73	71	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	42	20	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	50	20	^new
MARKET PULSE
MARKET PULSE	n/a	82	87	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	77	48	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cathay Financial.
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