underleveraged


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Underleveraged

Describing a company with too little debt. While it sounds strange, a company may be underleveraged because interest on bonds are usually tax deductible for the issuing company; thus, a bond issue can create higher earnings per share for stockholders. There is no metric for determining when a company is underleveraged and investors decide on it based on their personal perceptions.

underleveraged

Of, relating to, or being a firm that has insufficient debt in its capital structure. Because bond interest is deductible for tax purposes and is generally fixed in amount for a long period of time, some use of debt can often result in greater earnings per share for stockholders. Determining whether a company is underleveraged is usually a matter of opinion.
References in periodicals archive ?
Still, South Asia s share of the global economy remains strikingly low relative to its share of the world s urban population, and, in general, urbanization in the region remains underleveraged.
UNB shares have risen a stellar 17 per cent in the past three months but the bank has an underleveraged balance sheet, significant potential for accelerated loan growth, cost restructuring and a higher dividend payout.
This can include briefing the board and management on future workforce or talent trends, regulatory, and geopolitical risks, underleveraged market opportunities, and new solutions to previously unsolved human capital challenges.
Believes the restructured Cash America, with its leading market position, steady free cash flows, underleveraged capital structure and de-risked operating model is drastically undervalued on a cash-flow, asset value, replacement value or private ownership basis.
We also find that implementing firms are underleveraged suggesting that if a target leverage exists, firms will seek to repurchase shares in order to increase this ratio (Dittmar, 2000).
A net 34 percent of respondents say that corporate balance sheets are underleveraged, down from a net 40 per cent last month.
As we look forward from here, we believe that your Company is well placed to take advantage of the opportunities the region offers - vast resources, underleveraged consumers, and superior economic growth at attractive valuations.
He added: "Relatively cheap aircraft financing costs will continue to support earnings before income and tax, net margins and return on equity, as the business remains underleveraged and highly liquid.
Following the recent disposal in Hong Kong, DP World is underleveraged and we suspect the group could be looking to acquire assets particularly in Africa and or Latin America, where the growth prospects are attractive.
Compared to their counterparts in the developed world and other global emerging markets, consumers are underleveraged and we believe regional banks have the potential to rapidly increase their services in areas such as personal banking, mortgage and insurance products.
Kraft's lower margins, global scale, high diversification, and underleveraged balance sheet made it a good candidate for restructuring (Kraft--Annual Reports, 2003-2010).
There's a real underleveraged and under-articulated shift that's already happening that can be taken advantage of," he said.