Sunday 7 December 2014

Analysis of Eurokai

Eurokai, A German container and logistics company

Company: Eurokai

ISIN DE0005706535 | WKN 570653

Business: A German container and logistics holding company. They stand on two pillars: with 83.3% of the shares in Contship Italia S.p.A., as well as 50% of EUROGATE GmbH & Co. KGaA, KG.

Active: They run container terminals at the seaports of Gioia Tauro, La Spezia, Cagliari, Ravenna and Salerno in Italy, in Hamburg, Bremerhaven and Wilhelmshaven in Germany, in Lisbon in Portugal, Tangier in Morocco and in Ust-Luga  in Russia.

P/E: 16.3

Comment: This company appeared as much more exciting in the screeners. The Eckelman family owns 75% of the shares. Half of the shares are voting shares and the other half non-voting shares.

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

The P/E for Eurokai is a little bit too high for me with 16.3 but the P/B is great with 1.3 which in the end gives us a buy signal from Graham. The earnings per share is surprisingly high with 7% and the ROE is up at 14.2% which is ok. The book to debt ratio is down at 0.6 which is low but still ok.
In the last five years they have had a yearly revenue growth of 1.3% which is bad but still ok due to the hard times in Europe. This then gives us a motivated P/E of 9 to 12 which means that Eurokai is today slightly overvalued on the market.
They pay a very nice dividend of 4.9% but I do not like that it also represents almost 80% of their earnings so they better start pushing up their earnings!

Conclusion: Graham says yes to Eurokai but I do not. The P/B, ROE and dividend are all great for Eurokai but for me the P/E is too high, and they pay out too much of their earnings in dividends. I also do not like that the family Eckelman owns 75% of the company and that 50% of the shares have no voting power.

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DivHut said...

Thanks for sharing this analysis of Eurokai. Another seemingly good dividend candidate that I never heard of. How many years have they been raising? I also agree with your assessment about not liking that the family controls so much of the company. Still an interesting stock to look at.

Fredrik von Oberhausen said...

Hi DivHut,

by the look of it they pay out dividend according to earnings in combination with how much money the family needs. They made no raise between 2011 and 2012 so I guess for you dividend investors the answer would be one year.