S&P/ASX 200 Index (ASX: XJO) shares that have rock-solid balance sheets have a number of advantages compared to businesses that are laden with debt.
Cash may be undervalued by some investors but it's essential when a business needs it.
Think about how many companies had to do dilutive capital raisings during COVID-19 at very low share prices. These included Webjet Limited (ASX: WEB) and Qantas Airways Limited (ASX: QAN).
There are plenty of advantages to having cash and no debt. During times of economic stress, or any time, a well-resourced company can acquire a troubled competitor, strengthening its position.
Now that interest rates are higher, cash can generate extra earnings (from interest), whereas indebted businesses are now having to pay a lot more interest.
Finally, having a good balance sheet means that a business can pay pleasing dividends to shareholders without straining its financial resources.
Having said that, these are some ASX 200 shares with no debt and good levels of cash.
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Altium Limited (ASX: ALU)
Altium is one of the largest ASX tech shares, with a market capitalisation of $5.9 billion. It provides software and technology to the electronic printed circuit board design industry.
At the end of FY23, the company had cash and cash equivalents of US$201 million, with the company's bank balance boosted thanks to the generation of $55.7 million of operating cash flow.
The business is using its cash flow for a number of good purposes. It grew its full-year dividend per share by 14.9% to 54 cents and the company is also investing in its software offerings, such as Altium Designer and Altium 365, to improve its services for subscribers even further.
In FY24, the ASX 200 tech stock is expecting to grow its revenue by around 20% to at least US$315 million.
Over the past five years, the Altium share price has risen 68% though past performance is not a guarantee of future results.
New Hope Corporation Ltd (ASX: NHC)
New Hope is one of the biggest ASX coal shares in Australia and it's expecting to grow its production volume in the coming years, largely thanks to the New Acland mine in Queensland.
The company finished FY23 with a closing cash balance of $731 million and no debt after a convertible note repurchase. New Hope made operating cash flow of $1.5 billion in FY23, which was 34% higher than in FY22.
The ASX 200 stock declared a total full-year dividend of 70 cents per share, including a special dividend of 9 cents per share. The business will soon be benefiting from its 15% stake in Malabar Resources, the operator of the Maxwell Mine.
In the past five years, the New Hope share price has risen 66%.
Pro Medicus Ltd (ASX: PME)
Pro Medicus provides imaging software and services to hospitals, imaging centres, and healthcare groups worldwide.
The ASX 200 stock is expanding in North America and Europe and is investing for growth. It finished FY23 with $121.5 million of cash and other financial assets while remaining debt-free.
It increased its 2023 annual dividend by 36.4% to 30 cents per share. In the past five years, the Pro Medicus share price is up 516%.
