Wednesday, May 14, 2014

Analysis of Allianz 2014


A German financial service company


Company: Allianz

Business: A German financial service company that offer solutions concerning insurance and asset management. They have six different products / services: Private Insurance (Car, Health, Family House etc.), Business Insurance (for both large and medium sized companies), Asset Management (fixed income products, stocks and commodities), Global Lines of Business (reinsurance, life insurance and real estate), Assistance Services (automotive, travel, health & life and property) and finally Sustainable Solutions (microinsurance and investments). What I found interesting is that they have started to call themselves a financial service company...

Active: Active in over 70 countries with 83 million clients that are serviced by their 148,000 employees.

P/E: 9.3

Here you can find the previous analysis of Allianz.

contrarian values of P/E, P/B, ROE as well as dividend

The P/E of Allianz is very nice with 9.3 and the P/B is also good with 1.1 which gives us a very clear buy from Graham just like it became with the last analysis even though the P/B has started to increase somewhat. The earnings to sales have improved a little to 7% which is good and the ROE is at 12% which is so, so. The book to debt is awful with a ratio of 0.1 and is similar to what banks have. In the last six years they have had a yearly growth of 1.1% which is bad! They even had decreased revenue in 2013 compared to 2012 and this then gives us a motivated P/E of 8 to 10 which means that Allianz is fairly valued by the market today. They pay a nice dividend of 4.3% which represents 40% of their earnings so they should be able to keep it up with earnings either increasing or remaining the same.

Conclusion: Graham says yes to Allianz and I am slightly less enthusiastic about it. Sure one could step in today and get a nice dividend for future years to come but in my opinion this is a company that I want to buy when it is dirt cheap and currently it is no longer that. All the key figures are very nice besides from the ROE and I would not blame any one for deciding to step into Allianz also today and if one would be a shareholder already then I see no reason to sell it since the dividends keep increasing.

If this analysis is outdated then you can request a new one.

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