Monday 13 October 2014

Analysis of Ascopiave

Ascopiave, an Italian gas distributer

Company: Ascopiave

ISIN IT0004093263 | WKN A0LF39

Business: An Italian distributor and seller of natural gas. They are divided into three activities: Distribution (with 8,600 km of pipelines), Gas Sales (to 830,000 clients) and finally Other Services (generation and sale of heat and electricity).

Active: Italy only

P/E: 10.4

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

The P/E of Ascopiave is excellent with 10.4 and the P/B is also excellent with 1.1 which gives us a very clear buy signal from Graham. The earnings to sales ratio is ok at 5% and the ROE is so, so with 10.7%. The book to debt ratio is excellent with 1.7.
In the last five years they have had a revenue growth of only 2.3% but considering them being only present in Italy it is still higher than what inflation has been. This then gives us a motivated P/E of 9 to 13 which means that Ascopiave is today fairly valued on the market.
They paid last year an excellent dividend of 6.2% which however represents as much as 64% of their earnings which I like much less and it can often be a risk due to the market response of a decreased dividend.

Conclusion: Graham is saying yes to this company and so do I. The P/E, P/B and the dividend payment is excellent even though one needs to be a little careful there. They have not always paid out dividend. The first half year is looking worse than in 2013 which makes it additionally a little bit of a question mark. Due to their low growth rate they do not qualify for the stocks of interest list but for dividend investors this company could be of interest. Personally I like to have a couple of them in my portfolio which is why I find this company exciting but there are currently others on the stocks of interest list that has both potential as well as pay an acceptable dividend.

If this analysis is outdated then you can request a new one.

No comments: