⚠️

New Hope Corporation Limited

NHC · Energy

Proceed with Caution

Current Price

$4.51

Fair Value $6.8334% below

Market Cap: $3.80BUpdated 6 hours ago

95/100

Value

Buffett Analysis

PASS

40/100

Dividend

Barsi Analysis

FAIL

✕Dividend cut detected (30%+ year-over-year reduction)

✓9.1% yield - Above 6% target
✓Price 34% below max buy price
✓35.1% return on capital - Strong moat

Value Analysis (Buffett Principles)

Return on Equity (ROE)

Profit generated per $1 of shareholder investment

30.3%

Buffett: 20%

2025

16.7%

2024

18.7%

2023

43.1%

2022

42.5%

Buffett wants 20%+ because it signals a 'moat' - something protecting profits from competitors. Only 25 of 1,000 Fortune companies achieve this consistently over 10 years.

Dividend Analysis (Barsi Method)

Dividend Yield

Annual dividends as percentage of stock price

6yr AverageSCORED9.09%

Barsi: 6%

Yield 6% or higherYes

Barsi requires 6% minimum to ensure income beats inflation and provides meaningful returns. He uses 6-year average to smooth out one-time special dividends.

PASSED

9.09% yield meets Barsi's 6% minimum. Based on 6-year average, not one-time spikes.

Additional Metrics

Yield (TTM)

7.47%

P/E Ratio

9.02

P/B Ratio

1.45

52W Low

$3.33

52W High

$4.99

Owner Earnings

$0.51B

Intrinsic Value

$15.43B

EPS CAGR

53.0%

Analysis based on Warren Buffett and Luiz Barsi methodologies. Not financial advice. Learn how we analyze stocks →

Debt-to-Equity

How much the company owes vs. what it owns

0.14

Buffett limit: 0.5

Buffett prefers <0.5 because great businesses shouldn't need debt to generate high returns. Low debt also means surviving downturns without bankruptcy risk.

PASSED

Excellent. Very low debt (0.14) means strong financial flexibility and minimal bankruptcy risk.

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Formula: Total Debt ÷ Shareholders' Equity

Example: D/E of 0.3 means for every $1 of equity, the company owes 30¢. Lower is safer.

Gross Margin

Profit after production costs, before overhead

59.6%

4-year avg • Target: 40%+

2025

56.6%

2024

48.6%

2023

64.7%

2022

68.4%

40%+ margins indicate pricing power - customers pay a premium even when alternatives exist. Coca-Cola maintains 60%+ margins because of brand power.

PASSED

Healthy 59.6% average margin suggests sustainable competitive advantage.

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Formula: (Revenue - Cost of Goods Sold) ÷ Revenue × 100

Example: Selling a $10 product that costs $4 to make = 60% gross margin.

Liquidity Ratio

Short-term assets vs. short-term debts

2.08

Buffett target: > 1.5

2.08> 1.5

A ratio >1.5 means the company has $1.50 in liquid assets for every $1 of debt due within a year. This cushion protects against unexpected expenses.

PASSED

Strong liquidity. 2.08 ratio means ample cash to cover short-term obligations.

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Formula: Current Assets ÷ Current Liabilities

Example: If a company has $200M in cash, inventory, and receivables, but owes $100M within a year, current ratio = 2.0. Plenty of breathing room.

Free Cash Flow

Real cash left after running the business

$260M

Positive cash generation

Positive FCF means earnings are real, not accounting tricks. As Buffett says: 'Cash is fact, profit is opinion.' This cash funds dividends, buybacks, and growth.

PASSED

Positive cash generation. Company produces real cash after capital expenditures - can fund dividends, buybacks, or growth.

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Formula: Operating Cash Flow - Capital Expenditures

Example: A company with $100M operating cash flow spending $30M on equipment has $70M FCF.

Return on Invested Capital

Profit generated per $1 of capital invested in the business

35.1%

WACC: 9.0% • Threshold: 11.0%

2025

10.4%

2024

16.7%

2023

55.2%

2022

57.9%

ROIC measures how efficiently a company turns invested capital into profit. When ROIC exceeds the cost of capital (WACC), the company creates value. 10%+ sustained over 5 years indicates a durable economic moat.

PASSED

Exceptional 35.1% ROIC indicates strong economic moat and efficient capital allocation.

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Formula: NOPAT ÷ Invested Capital × 100, where NOPAT = Operating Income × (1 - Tax Rate)

Example: A company with $50M NOPAT on $400M invested capital = 12.5% ROIC. If WACC is 8%, each $1 invested creates 4.5¢ of value.

Sources: Warren Buffett's 1992 Letter to Shareholders • Joel Greenblatt, 'The Little Book That Beats the Market'

Earnings Predictability

Consistency of profits over time

5/10

Positive years • 53.0% CAGR

2025

$0.52

2024

$0.56

2023

$1.19

2022

$1.06

2021

$0.10

Buffett only invests in businesses he can forecast 5-10 years out. 8+ positive EPS years out of 10 with no losses proves the business generates reliable earnings through economic cycles.

PASSED

Cyclical business - earnings naturally fluctuate with commodity prices. Focus on dividend consistency instead.

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Formula: Count of positive EPS years in 10-year history

Example: A company with 10 consecutive positive EPS years (no losses) demonstrates predictable earnings power that Buffett seeks.

Sources: Warren Buffett's 2007 Letter to Shareholders • Mary Buffett & David Clark, 'The New Buffettology'

Earnings Yield

Return on investment at current price (inverse of P/E)

11.5%

Required: 7.5% (Treasury + risk premium)

Earnings Yield

11.5%

Required Yield

7.5%

Graham Number (P/E × P/B)13.0 ✓

Earnings yield must exceed 10-year Treasury yield plus a risk premium (typically 3%). If bonds yield 4.5%, stocks should yield at least 7.5% to justify the added risk.

PASSED

Strong value. 11.5% earnings yield exceeds threshold, and Graham Number (13.0) indicates undervaluation.

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Formula: (EPS ÷ Stock Price) × 100

Example: A stock at $100 with $8 EPS = 8% earnings yield. Compare to 4.5% Treasury yield: 3.5% premium for equity risk.

Sources: Benjamin Graham, 'The Intelligent Investor' • Warren Buffett's 1992 Letter

Margin of Safety

Discount to intrinsic value (Two-Stage DCF)

$12.81

Buy below this price for 30% margin

Good DealToo Expensive

$0$13$5

Current: $4.5165% below

The cornerstone of value investing. We calculate intrinsic value using Buffett's Two-Stage DCF: 10-year growth projection + terminal value, discounted at Treasury + industry risk premium. Predictable businesses need less margin; volatile ones need more.

PASSED

Exceptional 75% margin of safety. Buying $1 of value for 50¢ or less.

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Formula:

(Intrinsic Value - Market Cap) ÷ Intrinsic Value × 100. Intrinsic Value = PV of 10-year growth period + PV of terminal value (perpetuity at 2.5% growth), discounted at Treasury rate + industry risk premium (6-9%).

Example: A bank with $10B owner earnings, 3% growth, 7% discount: Stage 1 PV ≈ $78B, Terminal PV ≈ $154B, Total = $232B. If market cap is $250B, margin = -7.7% (slightly overvalued).

Sources: Benjamin Graham, 'The Intelligent Investor' • Warren Buffett's 1992 Letter: 'When you build a bridge, you insist it can carry 30,000 pounds, but you only drive 10,000 pound trucks across it.' • Buffett's 1988 Coca-Cola valuation (documented Two-Stage DCF example)

Dividend History

Track record of consistent dividend payments

10 years

2025

$0.34-13%

2024

$0.39-44%

2023

$0.70-19%

2022

$0.86+682%

2021

$0.11+83%

2020

$0.06-65%

2019

$0.17+21%

2018

$0.14+40%

Skipped YearNone

Cut 30%+Yes

6+ years with no skipped payments or 30%+ cuts proves the company can generate reliable cash through economic cycles. Consistency matters more than yield.

FAILED

Dividend was cut 65% in 2020. Cuts over 30% disqualify a stock.

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Example: A company paying dividends for 20 years, even during 2008 and 2020 crises, proves it can weather storms.

Maximum Buy Price

Highest price to lock in 6% yield

$6.83

Buy below this price for 6% yield

Good DealToo Expensive

$0$7$5

Current: $4.5134% below

Calculated from 6-year average dividend: Price Ceiling = Avg Dividend ÷ 0.06. Buy below this price and you're guaranteed 6% yield based on historical average.

PASSED

Excellent entry point. 34% below ceiling means you're locking in well over 6% yield.

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Formula: 6-Year Average Annual Dividend ÷ 0.06

Example: If a stock pays $0.72/year on average, price ceiling = $12. Any price below $12 locks in >6% yield.

Sector

Industry category of the business

⚡

Thermal Coal

Energy

BESST SectorYes

BESST sectors (Banks, Energy, Sanitation, Insurance, Telecom) provide essential services with predictable demand regardless of economic conditions. People always need electricity and banking.

PASSED

Energy is an essential service sector with stable, predictable cash flows - ideal for dividend investing.

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Example: During recessions, people cut Netflix but keep paying electricity bills. Essential services = reliable dividends.